CEC 2010 Annual Report

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COPPERBELT ENERGY CORPORATION PLC

Copperbelt Energy Corporation Plc

Annual Report 2010

Copperbelt Energy Corporation Plc

Annual Report 2010

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We are committed to: Supply reliable energy and high quality services to meet our customers’ unique and changing needs efficiently and proactively through robust infrastructure, diverse power sources and professional teams Increase value for our shareholders through responsible and transparent corporate conduct, innovation and investing prudently

To be the leading Zambian investor, developer and operator of energy infrastructure in Africa by providing innovative solutions and building strategic partnerships through committed professional teams

Being honest in all our dealings Supporting each other Building good team relationships Being open to new ideas Developing a ‘can do’ attitude

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The Copperbelt Energy Corporation Plc (CEC) is the outcome of an evolutionary process that commenced more than 60 years ago – when the Rhodesia-Congo Border Company (CEC’s founding predecessor) was founded, with a mandate to provide power solutions to mining companies.

Majority owned by Zambian Energy Corporation (Zam-En), CEC has a deep insight into the mining industry, which enables it to provide quality electricity and other power products and services to the majority of the mines in Zambia.

In 2007, CEC extended its mandate beyond Zambia, and has since been providing a transmission service to a mining operation in the Democratic Republic of Congo.

In November 2009, CEC became a full member of the Southern African Power Pool and is, therefore, well placed to serve mines throughout Southern Africa. CEC is fast positioning itself as a developer of energy infrastructure in Africa and is well respected in the region for its skills in designing and operating transmission systems.

Listed on the Lusaka Stock Exchange since January 2008, CEC is a licensed carrier of

telecommunications traffic using broadband optic fibre and is now a competitive retail sector player in telecommunications through a joint venture with Realtime Zambia.

The Company owns and operates around 900 kilometres of 220kV and 66kV transmission lines, 520 kilometres of optic fibre on power lines, and 250km in trenches, 38 major substations and 80MW of gas turbine generation. CEC accounts for about 50% of power consumed in Zambia.

To ensure high quality of supply, the network has a number of reliability enhancing features that include a high degree of network redundancy, stand-by generation, a well-equipped control centre and multiple sourcing points.

CEC seeks to be a strategic partner in private power projects or public-private partnership power projects within the region and is focused on opportunities that create value for the Company and its investors.

To achieve that, we continue to build appropriate partnerships that provide us with the necessary support to pursue and participate in viable new business opportunities.

Corporate Profile

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Chairman’s Statement 8

Report of the Managing Director - Operations 14

Report of the Managing Director – Corporate Development 20

Corporate Responsibility Report 29

Operational / Financial Highlights 32

Directors' Report 34

Statement on Corporate Governance 41

Statement Of Directors’ Responsibilities 44

Report of the Independent Auditors to the members of Copperbelt Energy Corporation Plc 45

Statement of Comprehensive Income 48

Statement of Changes In Equity 49

Statement of Financial Position 50

Statement of Cash flows 51

Notes to the Financial Statement 52

Corporate Governance Compliance Status 81

Directors 82

Corporate Contact Information 83

Bankers and Auditors 84

Contents

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COPPERBELT ENERGY CORPORATION PLC COPPERBELT ENERGY CORPORATION PLC

Chairman’s StatementThe year 2010, whose results I am pleased to report, was eventful for the Copperbelt Energy Corporation Plc (CEC). Commendable progress was made on various fronts, building on the efforts of previous years. The period ended 31st December 2010 recorded increased turnover of 9% over the previous period, earnings per share were up by 7%, and average load sales volume rose 8% over the comparable period.

These results have been achieved, in large part, because CEC has been able to attract and retain highly skilled and motivated professional staff. The drive to recruit graduate talent, which the Company embarked on a few years back, is clearly bearing fruit as the crop of graduate professionals taken on from

Hanson Sindowe

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about 2009 has gained considerable experience and with it, added responsibilities in line with the intention of the programme as well as the larger vision of the Company.

A deliberate decision was also taken to strengthen the availability, in the Company, of relevant skills capable of handling and delivering results with regard to the Company’s new business development.

This is an area that is becoming increasingly pivotal in respect of the future of CEC; hence it demands that professional staff with relevant skills and expertise in business development are available to drive this area of the business.

With such capabilities, we can be assured that the Company possesses the necessary skills and expertise to ably and successfully grow into its envisaged future.

Safety, Health and Environment (SHE)

During the year, the Company continued its pursuit of achieving SHE Excellence with emphasis on SHE Cultural Change, again, being the top most SHE driver.

Our focus in 2010 was twofold – cascading SHE training to all employees, following on the SHE training for Directors and Managers conducted in 2008; and operationalizing the SHE aspects of the business by improving our proactive and reactive SHE measures, continuing with the Managers’ SHE visibility tours and implementing the Tool Box Safety Talk – a system aimed at proactive incident prevention and used chiefly to demonstrate the involvement of frontline supervisors by ensuring that it (the Tool Box Safety Talk) was firmly embedded in the performance targets of all frontline supervisors.

Further, all the issues raised through the SHE Cultural Survey report are being addressed, and improving SHE communication internally is well in progress.

The pursuit of excellence entails an awareness of the challenges along the journey. Hence, it is a concern to the Company that statistics for road traffic incidents and accidents (RTIs/RTAs) were, in 2010, higher than the previous year. These are levels not desirable for the attainment of excellence in SHE across the business and measures, specifically a vehicle monitoring system to improve performance in this area, has been introduced as a positive reinforcement.

The one blot on an otherwise remarkable record was the unfortunate occurrence at Maposa substation in December, where an employee sustained burns due to non-compliance with system operations and safety procedures. Notwithstanding this, the Company’s SHE performance in 2010 was commendable; recording a laudable 1.3 million man-hours without a lost time accident (LTA) between August 2009 and December 2010.

Interventions in HIV and AIDS through provision of antiretroviral treatment, and malaria continued throughout 2010 with satisfactory results. To enhance our efforts in rolling back malaria, the Company purchased a fogging machine as an added measure to indoor residual spraying of homes and provision of subsidized insecticide treated bed nets to increase the effectiveness of the programme.

Business Environment & Performance Highlights

It was most encouraging to see growth returning across economic sectors, particularly mining, in 2010. Confidence within our mining customers continued to be buoyed by the prevailing high commodity prices, translating in increased production.

CEC posted positive results for the 2010 reporting period, during which capacity sales went up 8% on 2009, to an average of 470MW

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from an average of 436MW. This positive shift is attributable to the resumption of operations at one of the mines placed under care and maintenance during the downturn, a return to full production and expansion projects by some of our customers, underpinned by the international copper price rally that continued throughout the year. Investments in new mining operations and the expansion of existing ones could be seen during 2010, and evidenced by our signing of a power supply agreement with Konnoco Zambia Limited, for redevelopment of the Konkola North Copper Mine by Brazil’s Vale and Africa Rainbow Minerals of South Africa. The operation will take up to 100MW when fully implemented in the next four to six years. The mine is, however, expected to start drawing down up to 40MW of power as early as 2012.

A connection agreement for the implementation of the Muliashi Mine project in Luanshya was, during the year, signed with owners CNMC Luanshya Copper Mine (CLM). Project implementation activities have since begun. Muliashi will add 30MW to the current power requirements of CLM over three years. I am glad to report that CEC and CLM have also executed a new power supply agreement (PSA), through which CEC will continue to supply all of CLM’s

existing and new (Muliashi) power requirements.

Technical proposals were submitted to Mopani Copper Mines Plc to provide a connection to the proposed Synclinorium project, which involves the construction of a new shaft in Kitwe. The Synclinorium project has a projected total demand of 27MW once fully operational.

Konkola Copper Mines Plc also progressed its Chingola Refractory Ore (CRO) project. Additional capacity will be required in order to meet the power requirements of all these projects, once completed.

The projected load growth and the economic growth witnessed across a number of sectors, again, brings to the fore the need for new generation and of tariffs moving to cost-reflectivity. Hence, on the request of ZESCO Ltd, we commenced negotiations to review the bulk power supply tariffs. Consequently, we initiated parallel negotiations of the PSA tariffs with our customers. The current tariffs were last substantively reviewed in 2008, for a three year period.

Considerable progress has been made with regard to the Kabompo Gorge Hydroelectric

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project. The final feasibility study report was completed in early 2010 while the Environmental Impact Assessment report has been submitted to the Environment Council of Zambia for comments and approval. The project is expected to reach financial closure by the end of 2011.

Other developments of note during 2010 include the Government’s granting of authority to CEC to carry out feasibility studies of the hydro potential on the Luapula River sites. The Government of the Democratic Republic of Congo (DRC) has equally given support to the initiative.

Progress was made in respect of the construction of a new double circuit 220kV interconnector between Zambia and the DRC, whose construction is ongoing. The project is being undertaken jointly with the DRC’s national electric utility, SNEL.

The Company has established a unit to evaluate and develop renewable energy technologies. There is strong growth in such technologies world wide, and it is our view that Zambia is well placed to benefit from these technologies. By employing such proven technologies, CEC hopes to reduce its costs, particularly with regard to diesel. Initial successes include the commissioning of a bio-

diesel plant in Kitwe, and the securing of funding for feasibility studies in generation from bio-mass associated with working plantations on the Copperbelt.

The Company has invested further into optical fibre in metropolitan areas, and has secured a strong customer base with many of the country’s major institutions making use of the fibre to improve connectivity between different business sites, and to connect to the internet. There are plans to increase investment in this sector during 2011.

Stakeholder Relations

Two interim dividends, totaling US$10 million [K48.19 per share], were paid out to eligible shareholders of the company during the year, underscoring the Company’s desire to create value for our shareholders.

In a year that markets, the world over, were still trying to find their pre-2008 buoyancy, the CEC stock performed very well, posting increases month-on-month throughout the year, and closing the year at K615 per share (2009: K430) – the first time since the post-listing high of K1,200

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per share that the stock has sustained such a consistently firm performance. The latter part of the year was especially positive, as the market’s appetite for the CEC stock increased. The 2010 closing price was 43% up on the 2009 close.

The Investor Relations function of the business strives at all times to improve the quality of communication between the Company and its shareholders. Automated procedures for issuing correspondence to our shareholders were developed in 2010, and the Company continued to capture more accurate records of shareholder details.

Corporate Responsibility

In 2010, the major part of our donation budget went to help young people through education sector assistance and sport, particularly the Power Dynamos Football Club, in so far as the latter was concerned.

The refurbishment of the Arthur Davies Stadium was completed at a cost US$860,000 and the stadium re-opened in July 2010.

The fitness centre and gymnasium for staff and the public that I reported on last year was, during the year, completed at a cost of US$478,000 and opened to public use.

The process of handing over the houses that were constructed for the relocated households in Chililabombwe was completed. A total of US$575,000 was spent on constructing better houses and relocating the eight affected households.

The Company is supporting the improvement of higher education through a partnership with the School of Engineering at the University of Zambia (UNZA), whereby a senior manager from CEC has been seconded to the school for two years on a full time basis to construct new high voltage laboratories and assist in curriculum development. Similar support is planned for the Copperbelt University.

Recognition

During the period under review, CEC added to its trophy cabinet – marking another year of local and international accolades for exceptional performance in different spheres of the business.

CEC picked up the Infrastructure Investment Award – 2010 Developer of the Year given by Africa Investor; the Investor Relations Award 2010 for the Best Online Annual Report in Africa conferred by World Finance and was once again recognised by the Zambia Revenue Authority for being exceptionally tax compliant.

Deserved recognition goes to everyone that contributed to the Company making these achievements.

Board Appointments & Operation

During the year, Helen Tarnoy, who served as Deputy Chairperson of the board resigned from the board while Peter Mumba, who represented the Zambian Government through the Ministry of Energy and Water Development, also left the board.

The board is grateful to both Helen and Peter for the enriching service they rendered throughout the period they served as members of the CEC Board of Directors.

Consequently, Jean Madzongwe has assumed the position of Deputy Chairperson of the CEC Board of Directors, while FMO and Aldwych International are now represented on the board by Robert Chestnutt. Teddy Kasonso now serves on the board as the representative of the Zambian Government.

On behalf of the board, I welcome Jean into her new role and extend a warm welcome to Robert and Teddy to the CEC Board of Directors. We look forward to benefitting from their vast experience.At the Annual General Meeting of the members of the Company, held on 26th March 2010, three

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non-executive Directors (Munakupya Hantuba, Emmanuel Mutati and Jonathan Muke) retired from the board and were re-appointed to serve on the CEC Board of Directors.

The three members served the board diligently throughout the year and the Company has benefited much from their level and depth of knowledge and experience.

In November 2010, a board committee to undertake the task of reviewing the Company’s new business development projects was established. The Business Development Committee comprises 6 members – two Executive Directors, three Non-Executive Directors and an ex-officio.

Our board conducted itself in accordance with all relevant set and voluntary codes of corporate governance and standards relevant to the operations of the Company.

Business Outlook

We have a positive outlook for 2011, backed by the developments taking place on the mining landscape not only in Zambia but across the region and the impressive rally of the global metal prices, particularly copper and cobalt. We believe that the new investments made by our customers in more efficient operations have made Zambia a more competitive copper producer, which should ensure that the country is in a better position to withstand future reductions in the copper price.

With the supply and demand balance for energy within the Southern African Power Pool (SAPP) still being tight, and expected to remain so for the next few years, there is an ever present need to not only bring on stream new generation, but also to address transmission constraints so as to facilitate increased power trading within the SAPP. The long lead time to developing new generation plants is of concern, which may result in power shortages in the next few years, whilst the regional economies continue to grow without

adequate commissioned power generation infrastructure.

CEC is on the look out for projects in the region that make prudent investment sense and create value for our shareholders. We are already actively considering a number of projects, which the Company has been invited to invest in by various developers.

Closer to home, the new projects and expansions being undertaken by our existing and potential customers will demand a considerable level of additional capacity, which should be matched by a robust network capable of effectively and innovatively serving our customers’ needs for reliability and quality of supply.

The Company’s sustainability and continued growth is of paramount importance, hence, our strategy is that of continued investment in projects that provide an avenue for the business to diversify from its traditional supply of electricity to the mines on the Copperbelt, without compromising in any way the level and quality of service that the Company is known for. Developing the Company’s generation and transmission portfolio is of particular interest to the Company and I am pleased to report that steady progress is being made with respect to identifying viable projects in this new aspect of the business.

Conclusion

We are positive about the business going into 2011 and of the prospects already in the pipeline. We remain confident of the value that the projects being pursued will bring to the business and have a solid team, in all the Directors and staff, to deliver this value.

Hanson Sindowe

COPPERBELT ENERGY CORPORATION PLCNeil F. Croucher

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Report of the Managing Director - Operations

Safety, Health and Environment

Safety, health and environment (SHE) remains CEC’s number one priority. The main areas of focus for the year in achieving SHE excellence were improving the SHE culture in the workplace through provision of SHE training to all employees, with emphasis being on the roles and responsibilities of employees in achieving a SHE cultural change. The second area of focus was aimed at operationalising SHE in the business by improving the SHE statistics and implementing Tool Box safety talks.

Owing to improved training, work procedures and emphasis on accountability, CEC achieved a reduction in lost time accidents from four (4) in 2009 to 1 in 2010; after going 1.3 million man hours without a lost time accident. There was also a reduction in system breaches and permit withdrawals. Notwithstanding these achievements, CEC’s safety record is not yet where we want it be. The topmost challenge was the escalating road traffic incidents (RTIs) and road traffic accidents (RTAs). CEC recorded 10 RTAs in 2010 compared to 7 in 2009, and 33 RTIs compared to 27 the previous year. One measure introduced to address this is the GEOTAB satellite vehicle monitoring system, which it is hoped, will help the company monitor vehicle usage.

CEC continued to implement its HIV and AIDS programme introduced in 2002. During the year, the company sustained its provision of free anti-retroviral medication, training of peer educators and counsellors and supporting community

based programmes. The roll back malaria programme was also carried out and it continues to yield positive results.

The company maintained its good performance in the various environmental management aspects that it monitors. CEC complied with all statutory requirements for licence renewal and reporting. Full compliance was also achieved for statutory emission limit for the emergency power plant.

Business overview

The performance of the Zambian economy in 2010 showed marked improvements over the previous two years. The growth was driven by, among other factors, the increased copper prices on the world market and with it, increased copper production. It is expected that this growth will continue to be driven by the plethora of mining projects that are coming on stream. Production levels for the key commodities of copper and cobalt should continue to steadily increase especially as the smelters and mines, which cut back or ceased operations in the wake of the global financial crisis, recommence and move to full production.

As a result, CEC’s mining customers, who consume much of the power produced in Zambia, resumed some of their expansion projects that were shelved during the period of the global financial and economic meltdown. Slow but steady increases in power demand were registered during 2010, compared to the

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year before. Power availability in the country during the year generally improved, although a major power outage occurred in June 2010. Investment in the power sector remains critical as power availability will emerge as one of the key constraints for future growth and development in Zambia in the long term.

During the year, CEC continued to concentrate on achieving its mission and in doing this, focussed on responding to the unique needs of its customers, achieving excellence in its operational metrics, engaging constructively with policy makers and regulators, demonstrating environmental stewardship, adhering to safety standards and staying connected to its community.

Power Purchase and Sales

Power purchases and sales continue to be underpinned by the Bulk Supply Agreement (BSA) between CEC and ZESCO Ltd (ZESCO) and the various Power Supply Agreements (PSAs) between CEC and its customers. Power purchased from ZESCO accounted for 99.98% of CEC’s total requirements, with the balance being supplied from CEC’s gas turbine alternators (GTAs). ZESCO’s performance in respect of its role of supplying

bulk power was satisfactory throughout 2010, with only one blackout incident recorded on 18 June 2010, which affected the whole country. Apart from the high voltage experienced at system start up, management of the incident greatly improved in comparison to similar cases in the past. Subsequently, a combined team of engineers from CEC and ZESCO was formed to seek short and long term solutions to the problems that arise when there is a major disturbance affecting the Zambian power network. The team commenced its work during the year and many of its recommendations have been implemented. It was, therefore, most pleasing to note that when, on 26th August 2010, there was a major system disturbance in a neighbouring country’s power grid, which resulted in Zambia becoming separated from the Southern Power Pool (SAPP) grid, the Zambian system remained intact. Such incidents have previously resulted in the Zambian system being blacked out but, on this occasion, automated systems restored the supply/demand balance and quick operator responses reduced the extreme over-voltages within minutes; thereby resulting in a very minor impact on Zambian consumers.On the power sales front, energy consumption by CEC customers increased by 9% from 3,338 GWh in 2009 to 3,640 GWh during the year under

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review. This recovery and ramp up in demand was also represented in increased capacity sales which rose by 8% from 436MW in 2009 to 470MW in 2010. A peak demand of 487MW was achieved in November 2010. The system load factor registered a 6% increase to 86%. The capacity sales performance was undoubtedly driven by the copper price improvements of about 24% throughout the year as shown in the graph below.

However, the noticeable dips in two months of the year were due to shut downs undertaken by some customers to overhaul equipment. Non-recovery of the total capacity sales to pre-economic downturn times of 520MW was mainly due to continued closure of the Chambishi Metal’s Cosak smelter, designed to produce cobalt, which has remained under care and maintenance to-date.

Wheeling for domestic and international customers continued to form an integral part of CEC’s business. Domestic wheeling, which involves transmission of power through the CEC system on behalf of ZESCO, was sustained at normal business levels throughout the year. Wheeled domestic energy was 1,660GWh compared to 1,611GWh the previous year. International wheeling, on the other hand, declined due to the expiration of power purchase agreements between the power utilities in the region on whose behalf CEC wheeled the power.

The entire fleet of six emergency Gas Turbine Alternators (GTAs) was available throughout the year. GTA reliability improved to 92% from 90% in 2009. The improvement was partly due to the replacement of auxiliary equipment and major refurbishment works on the GTA plant where frequent failures were previously experienced. However, plant availability was down at 97% compared to 98% the previous year. This was attributed to a two week outage of the Maclaren GTA on which exhaust rehabilitation works were being carried out. Further, the GTAs were operated to provide emergency power to CEC’s customers during the national power outage, which occurred in June and, glad to report, they

performed according to expectation.

System Maintenance

System capacity continued to be firm. However, system capacity constraints which include diminishing transformer capacity as a result of load growth, inadequate reactive power support and line capacity, have been identified as a cause for concern and a strategy developed to address them. As part of the strategy, higher capacity transformers were procured and installed where existing units were running out of capacity. Power factor correction capacitor banks were installed at major switching stations to improve capacity and aid voltage regulation. In addition, customers were encouraged to undertake similar installations downstream.

The system maintenance strategies that have been implemented over recent years continued to be employed during the year. Condition based maintenance, defect maintenance and system primary equipment testing continued as scheduled. Condition monitoring activities included transformer oil sampling, diagnostic SFRA tests and routine thermographic inspections. The company remains alert to the fact that there is need to invest in more test equipment especially for testing transformers which are aged and require stringent condition monitoring.

Significant progress was made on the power factor correction project. Some final works remain to be carried out before the equipment can be powered up. As reported last year, this project once completed, will greatly contribute towards stabilising the voltages on the Copperbelt.

Tariff review

Some of the Power Supply Agreements (PSAs) that CEC has with its customers are nearing the end of their term. Specifically, PSAs with four customers will expire in 2012. Therefore, during the year CEC undertook negotiations with two of these customers, with a view

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to, among other things, extend the terms of these PSAs. This culminated in the signing of necessary amendments extending the PSAs for further periods of 10 and 15 years respectively. Negotiations with the other two customers will commence in quarter one of 2011.

At the request of ZESCO, a process to renegotiate the tariffs at which CEC purchases power commenced. CEC also commenced a parallel tariff renegotiation process with its customers. The two processes will run concurrently with the expectation that finality will be achieved in the coming year. The review of tariffs was last implemented in 2008. In addition, CEC has proposed to adjust tariffs at which it provides domestic wheeling to ZESCO.

During the year, CEC commissioned a Cost of Service study, which is expected to identify the cost elements involved in the Company’s provision of services to each customer. A South African based consultancy firm, NETGroup Solutions SA (Pty) Limited, has been engaged to carry out this study. This process is important as it will help CEC understand the cost of serving each of its customers and by extension, its ability to continue operating as a commercially sustainable

entity for the foreseeable future. The results from the study are expected during the first half of 2011.

Southern African Power Pool (SAPP) Membership

Following its admission to full membership of the SAPP in November 2009, CEC enhanced its participation in SAPP activities during the year. Some of the primary ongoing activities by SAPP include setting up of the day ahead market (DAM), revision of the operating guidelines, and monitoring of various transmission and generation projects that will help bridge the demand/supply gap in the region. In all these, CEC lent its support to the processes aimed at transforming the SAPP into a reliable competitive market.

Core business expansion

In line with our mission to meet customers’ unique demands, CEC has set out to diligently work with its customers to ensure that power requirements of their planned expansion projects

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are adequately addressed. This is supported by CEC’s understanding that, as the copper prices recover, its customers’ confidence in progressing some of their expansion projects will grow. Therefore, notable progress was made during the year with targeted projects reaching advanced stages.

One key achievement was the signing of a power supply agreement of an initial term of 25 years, with a new mining customer on the Copperbelt, known as Konnoco Zambia Limited. Konnoco, which is redeveloping the Konkola North Mine located in Chililabombwe, is owned on an equal share basis by Africa Rainbow Minerals of South Africa and Vale of Brazil. This mine is expected to draw down 40MW from 2012 but has the potential to increase to 100 MW if all phases of the project are developed.

Significant progress was made on the Muliashi project, which is being undertaken by CNMC Luanshya Copper Mine (CLM) and is expected to take up to 30MW once fully operational. A connection agreement, through which the Muliashi project will be implemented, has been signed and project implementation activities have commenced. Completion is set to take place by the end of 2011. Furthermore, during the year, CEC and CLM executed a new PSA that will see CEC continue to supply all CLM power requirements, including additional power requirements as a result of the Muliashi Project. This new PSA will run up to 2024.

Network extensions associated with the planned development of a new mine shaft by Mopani Copper Mines (MCM) at Nkana in Kitwe was another project that achieved closure on technical aspects, with financial closure expected in 2011. This project, the Synclinorium project, has a projected total demand of 27MW. Its

location is in close proximity to the existing CEC infrastructure, and, as a result, minimal capital expenditure will be required to make power available to the project.

Various other projects were at early development stages by the end of the year.

Customer relations

CEC continued to engage its customers throughout the year through regular communication. This interaction yielded positive results.

Employee Relations

As always, CEC ensured that cordial employee relations were maintained throughout the organisation. A mentoring program was introduced in the company, whereby experienced members of staff were attached to new employees in a bid to share their expertise, professional knowledge and render support. The programme has worked well so far and it is the intention of the company to continue with it.

A skills-mapping exercise was conducted among all employees to assess training needs in the company. The results showed that the company has a sound skills base with generally well trained staff. However, CEC will continue to provide training where gaps exist and to ensure that the staff have the right skills to meet the ever changing technological and business environment.

Neil F. Croucher

COPPERBELT ENERGY CORPORATION PLCMichael J. Tarney

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Financial Report for the Year Ended 31st December 2010

Statement of Comprehensive Income

Revenue arises primarily from the sale of power to the Company’s mining customers, and the provision of domestic and international wheeling services. Revenue increased by 8.5% to US$167.3m, mainly due a 7.8% increase in maximum demand from the Company’s mining customers (470MW in 2010 vs. 436MW in 2009), and tariff indexation in line with the US PPI index.

Cost of sales, which mainly comprises power purchased from ZESCO Limited [ZESCO] under the Bulk Supply Agreement increased by 8.5% to US$121.4m arising mainly from an increase in purchased power from ZESCO of 6% (438MW in 2010 vs. 413MW in 2009) and indexation of the ZESCO tariff to the Company in line with the US PPI index.

Gross profit increased by 8.3% to US$45.9m from US$42.4m in 2009, in line with the increase in sales to the Company’s mining customers described above.

Other operating income decreased by 16% to US$5.1m from US$6.1m the previous year. An explanation of the change is given below:

• Incomefromtelecommunications,mainlyarising from the sale of capacity on the

Report of the Managing Director – Corporate Development

Company’s national optical fibre network grew by a factor of 300% to US$1.4m from US$0.3m the previous year;

• Thecapitalcharge,comprisingpaymentsfrom Chambishi Metals PLC towards the capital cost of the substation at Chambishi remained constant at US$1.5m;

• Writebackofprovisionsnolongerrequired decreased by 76% to US$0.9m from US$3.8m the previous year. These items are by nature variable, and arise from risk sharing agreements with the Company’s customers whereby the Company’s level of contribution to the capital cost of substations constructed to supply new mining operations is linked to the quantity of additional power purchased by mining customers;

• Sundryincomeincreasedby163%toUS$1.3m from US$0.5m the previous year, and includes income derived from providing professional services to customers, such as the design, procurement and construction of new transmission assets.

Operating expenses increased by 14.7% to US$35.2m from US$30.7m the previous year. An explanation of the change is given below:

• Depreciationoffixedassetsincreasedby 14% to US$10.7m from US$9.6m the previous year;

• InsurancecostsremainedconstantatUS$1.5m. Insurance policies in place

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cover the Company for property damage to primary and secondary equipment, public and employee liability, directors’ and officers’ insurance, and insurance for motor vehicles and moveable plant;

• Personnelandstaffrelatedcostsincreased by 35.5% to US$14.5m from US$10.7m the previous year. The factors that led to this increase included:

o a reduction in the amount of labour capitalised on projects of US$0.8m following the completion of the Northern Area transmission project;

o the effect of a stronger Kwacha during 2010 (average rate 4,797) compared to the previous year (average rate 5,047) which increased salary costs when converted into US Dollars. The majority of the Company’s employees are paid in Kwacha;

o an annual average pay increment to employees paid in Kwacha of 12% and enhancement of the salaries of certain grades of employees to reflect increased levels of skills and responsibilities; and

o the Company complies with IAS 19 in the preparation of its financial statements, and provides in full for deferred employee benefits. Personnel and staff related costs include a charge arising from an increase of US$1.1m in deferred employee benefits from US$2.8m at 31st December 2009 to US$3.9m at 31st December 2010. The provision is calculated by an independent actuary. A significant contributing factor to the increase in provision was a reduction in the discount rate applied by the actuary, which is linked to improved macro-economic stability in Zambia.

• Storesandmaintenancecostsincreasedby 47% to US$2.5m from US$1.7m the previous year. The increase was significant as certain activities had been curtailed during the first half of 2009 to conserve working capital, due to the low copper prices at that time;

• FootballexpensesincreasedbyUS$0.1mto US$0.5m. The Arthur Davis Stadium in Kitwe was refurbished and re-commissioned during the year;

• Otheroperatingexpensesreducedby30% to US$5.8m from US$8.3m the previous year. A reduction in legal costs in 2010 contributed significantly to the reduction, as well as the capitalization of development costs of the Kabompo Gorge Hydro Project during 2010 (US$1.4m included within fixed assets additions), whereas development costs in 2009 of US$1.4m had been expensed. The difference in treatment of costs arose due to the confirmation of the results of the feasibility study in 2010 that the project is considered to be technically and economically feasible.

Results from operating activities reduced by 11% from US$17.8m to US$15.8m with the increase in gross margin offset by an increase in operating expenses and a reduction in other operating income.

Finance income reduced by 44% to US$0.6m from US$1.1m the previous year. The reduction was attributable to an improvement in the timeliness of payments from the Company’s customers, as interest is charged only when payments are made after the due date under the relevant power supply agreement.

Finance expense reduced by 39% to US$1.1m from US$1.8m the previous year, mainly due to a reduction in the LIBOR rate applicable to the Company’s debt facilities, and a reduction in the quantum of outstanding loans compared to the previous year.

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Profit before tax decreased by 11% from USUS$17.1m to USUS$15.2m.

Income tax expense (before tax on other comprehensive income) was US$5.0m compared to US$6.0m the previous year. The effective rate of tax on profit was 32.7% compared to a rate of 35.1% the previous year. The difference was mainly due to the effect of unrealised exchange differences in the tax computation arising from year on year movements in the exchange rate.

Other comprehensive income arising from gains on cash flow hedges was US$3.8m compared to US$1.3m the previous year. Both gains arose from the hedging policy of the Company, through which a more competitive rate than the prevalent spot rate for the conversion of dollars into Kwacha has been obtained.

Total comprehensive income increased by 7% to US$12.7m from US$11.9m the previous year.

Earnings per share increased by 7% to 1.27 US Cents per share from 1.19 US Cents per share the previous year.

Statement of Changes in Equity

Retained earnings increased by 8% to US$48.6m at 31st December 2010 compared to US$44.9m at the previous year end.

The adjustments to retained earnings were (i) retained profit of US$12.7m for the year (addition), (ii) dividends totaling US$10.0m declared and paid during the year (reduction) and (iii) depreciation added back to retained earnings of US$0.9m (addition) being the depreciation charged on the revalued portion of fixed assets in the statement of comprehensive income.

Total equity increased by 2% to US$161.0m from US$158.3m at the previous year end. Included in equity is the revaluation reserve, which reduced by US$0.9m to US$112.2m at 31st December 2010 from US$113.1m at the previous year end.

Statement of Financial Position

The net book value of fixed assets was US$239.3m at 31st December 2010 compared to US$236.2m at the previous year end. Total fixed asset additions were US$13.8m including:

• US$0.7mofbuildings;• US$4.0mofprimaryequipmentonthe

Company’s transmission network;• US$3.2mofsecondaryequipmentonthe

Company’s transmission network;• US$1.3mofgeneralequipmentand

fixtures;• US$0.6mofmotorvehicles;• US$3.8massetsincreaseincapitalworkin

progress, total US$9.6m at 31st December 2010. These include assets that are in the process of being commissioned, and include an amount of US$1.4m relating to the Kabompo Gorge Hydro project.

The depreciation charge was US$10.7m.

Total current assets were US$36.3m at 31st December 2010, a reduction of 1% compared to total current assets of US$36.5m at the previous year end.

Stock was largely unchanged from the previous year end at US$3.5m, the largest component of stock being liquid fuel held in stock for the Company’s fleet of gas turbine alternators and the Company’s vehicle fleet.

Trade and other receivables were US$24.1m at 31st December 2010, a 22% reduction to the previous year end total of $US30.7m. Within this balance, trade debts owed mainly by CEC’s mining customers reduced by 30% to US$16.9m as the customer payment record improved. An amount of US$2.7m over due from the Congolese utility SNEL has been provided for within trade receivables (provision at 31st December 2009 was US$3.2m). The Company has entered into an arrangement to fully recover this amount from SNEL in future as an off-set against a power trading transaction.

24


Cash and cash equivalents increased to US$8.8m compared to US$2.3m at the previous year end.

Total assets increased by 1% to US$277.6m at 31st December 2010 compared to US$274.7m at the previous year end.

Current liabilities increased by 25% to US$43.5m compared to US$34.8m at the previous year end. Key movements were:

• Tradeandotherpayablesincreasedby40% to US$34.5m from US$24.6m at the previous year end;

• AnamountofUS$1.4mpayabletoZambian Energy Corporation (Ireland) Limited, the Company’s largest shareholder, was re-paid during the year;

• TaxpayableincreasedtoUS$1.8mfromUS$1.7m the previous year.

Non-current liabilities decreased by 10% to US$73.1m compared to US$81.6m at the previous year end. Key movements were:

• Reductionininterestbearingloansby22% to US$24.9m at 31st December 2010 arising from debt repayments during the year;

• Reductioninnon-currenttradeandother payables by 16% to US$11.2m. The residual amount relates to an amount payable to First Quantum for the substation connecting Frontier mine;

• Anincreaseof40%indeferredemployeebenefits to US$3.9m in line with the actuarial valuation;

• AreductioninthedeferredtaxbalancetoUS$33.1m from US$33.4m the previous year.

Total loans outstanding at 31st December 2010 had decreased by 18% to US$32.1m compared to US$39.3m at the previous year end, thereby reducing the level of gearing of the Company. An amount of US$6.0m was repaid on the Company’s main loan facility with Citibank and DEG, and an

amount of US$1.2m was repaid to DBSA during the year. A further amount of $7.2m is scheduled to be re-paid on these facilities during 2011, although it is also anticipated that the Company will acquire new financing facilities during the year (see below).

Total equity and liabilities increased by 1% to US$277.6m at 31st December 2010 compared to US$274.7m at the previous year end.

The CEC Board approved the Company entering into a new three year amortising loan agreement with Citibank for US$10m in November 2010, for which a term sheet was signed on 1st December 2010. The loan is expected to become effective during the first quarter of 2011.

Statement of Cash Flows

Cash inflows before working capital changes increased by 6% to US$30.3m compared to US$28.6m for the previous year. The improvement was due to the increasing underlying profitability of the Company.

Net cash inflows on operating activities increased by 213% to US$36.4m compared to US$11.7m for the previous year. This movement demonstrates an improvement in the working capital of the Company, with debtor days decreasing. The tax payment was higher in 2009 at US$8.1m compared to US$6.5m in 2010 arising from the settlement of outstanding tax returns with Zambia Revenue Authority during 2009.

Net cash outflows from investing activities increased by 58% to US$13.1m from US$8.3m the previous year, mainly due to the increased investment in fixed assets undertaken by the Company at US$13.8m for the year compared to US$7.3m for the previous year.

Net cash outflows from financing activities increased to US$17.2m from US$17.0m during the year. The dividend paid during the year remained constant at US$10.0m.

25


There was a net increase in cash and cash equivalents of US$6.2m compared to a net decrease in cash and cash equivalents of US$13.6m during the previous year. Cash and cash equivalents were US$8.8m at 31st December 2010, compared to US$2.3m at 31st December 2009.

Share Price Performance on the Lusaka Stock Exchange

The share price, as at 31st December 2010, was K615 per share, compared to K430 per share at the previous year end, an increase of 43%. In comparison, the Lusaka Stock Exchange (LuSE) all share index recorded an increase of 19% in Zambian Kwacha terms and 15% in U.S. Dollar terms.

The dividend yield expressed in Kwacha as a percentage of the year end share price was 8%.

The Company was awarded an international prize for the quality of its on-line financial reporting during the year by the London based organization World Finance.

Development Activities

The main development activities undertaken by the Company during the year are summarized below.

Energy Sector – Key Trends

The need for increased investment in the energy sector is being widely supported by all Governments in the Southern African Development Community (SADC), as it is widely known that power utilities in the region do not possess sufficient generation and transmission capacity to meet the needs of their growing economies.

This has prompted regulators to approve increased tariffs, such that the tariff paid by consumers is considered to be cost reflective. In

practice, this means that the tariff will need to be sufficient to meet the marginal cost of new transmission and generation projects when they are commissioned, and regulatory systems will need to evolve to ensure that independent power producers are treated fairly and transparently along side the host national utilities.

There are abundant untapped energy resources in Southern Africa, with Zambia well placed to develop new hydro, thermal (coal) and renewable projects.

The Directors of the Company believe that the Company has a role to play in investing in new generation and transmission capacity, and some of the projects under development are listed below.

Second Zambia – DRC Interconnector Project

This project comprises the construction of a new dual circuit 220kV interconnector between the two countries that will enable the transmission of 550MW power between the two countries on a firm basis.

Works on the project in Zambia are currently being co-ordinated with the contractors on the (Democratic Republic of Congo) DRC side.

Kabompo Gorge Hydro Project

The final feasibility study for the project was issued by the consultant, Amanzi (a consortium of Arcus Gibb, Knight Piesold and SSI) in June 2010. The report indicates that the project is feasible, provided that geological and hydrological risk can be adequately addressed, and tariffs can migrate to cost reflective levels.

The proposed output of the power station is 40MW of capacity and 166GWh of energy per annum, and the project design specifies a roller compacted concrete dam that is 47.5m high and 123m long, a reservoir with an area of 3,485

26


hectares, an underground chamber for the power house, and 4km of tunneling. A transmission line will be constructed to connect to the national grid at Lumwana.

Consequently, the following additional activities were undertaken during the year:

(i) Submission of draft Implementation Agreement to the Office for Promoting Private Power Investment for further discussion.

(ii) Completion of the draft Environmental and Social Impact Assessment that was submitted to the Environmental Council of Zambia in December 2010.

(iii) Signature of Memoranda of Understanding with the Chiefs in the affected areas of North Western Province through which the Company has agreed to respect high standards of corporate social responsibility.

(iv) Request for Expressions of Interest from potential contractors through advertisement in the international media. Seventeen responses were received, from which a shortlist of five companies has been selected, who will be invited to submit a full bid. Final bids are expected

to be received during the third quarter of 2011.

(v) Appointment of financial and tax advisors.

(vi) Design of a new township at the project site. It is expected that significant further progress will be made in developing the project during 2011, with the selection of an Engineering, Procurement and Construction (EPC) contractor and project lenders, further development of project documentation and site preparation activities.

Hydro Projects on the Luapula River

The Company submitted a request to the Public Private Partnership (PPP Unit) of the Ministry of Finance and National Planning, under the provisions of the Public-Private Partnership Act No. 14 of 2009, to undertake feasibility studies on hydro sites on the Luapula River, as well as a transmission line connecting the Copperbelt Province to Luapula Province through the ‘Pedicle’ region of the DRC. The Government granted the Company the authority to undertake the studies; and work on the studies on the river schemes has commenced. The Company also obtained the written support of the Government of the DRC,

27


as the Luapula River defines the border between Zambia and the DRC, and the transmission line would traverse the Katanga region through the Pedicle. The long term intention is to develop these schemes under a public-private partnership arrangement where the power that is generated is made available for use in both Zambia and the DRC.

The work to be undertaken during 2011 relates to an assessment of the environmental and social, hydrological and topographical aspects of the whole river catchment area to ensure that the overall design and sequencing of the different potential schemes along the river is optimised. The details of the various studies to be undertaken are currently under discussion with the Governments of Zambia and the DRC.

Nansanga Farm Block

The Company responded to an invitation for expression of interest by the PPP Unit of the Ministry of Finance and National Planning to develop the power distribution network for the proposed Nansanga Farm Block. Following review of the Company’s expression of interest, the PPP unit pre-qualified the Company. This means that the Company will be eligible to submit a formal bid once the Request for

Proposals is issued out. This is likely to be done after the determination of the likely initial farming investment in the bloc, following invitations by the Zambia Development Agency.

CEC Renewables

A unit in the Company has been created to focus on the development of renewable energy projects. The initial scope of the unit has been to identify pilot projects in the areas of bio-fuels, and bio-mass and solar electricity generation that may lead to viable business units in future. Key developments during the year included:

(1) Commissioning of a bio-diesel plant in Kitwe

A plant capable of refining up to 1,000,000 litres of bio-diesel from jatropha oil has been commissioned in Kitwe. An agreement to purchase oil has been entered into with the Kapiri Mposhi Jatropha Growers’ Association, starting at a level of 200,000 litres per annum. The bio-diesel will be applied for use in the Company’s own vehicle fleet and generating plant in the first instance.

28


(2) Securing grant funding to evaluate options for the development of energy from bio-mass

The unit has been successful in securing grant funding with the Copperbelt Forestry Company to evaluate technologies for the conversion of wood waste into energy. There is much surplus bio-mass available on the Copperbelt, which currently is not used. The same technology solution may also be applied at the Kabompo Gorge hydro project in North-Western Province, as some woodland will require to be cleared in the area where the reservoir will be formed.

Telecommunications

The Company consolidated its investments in optical fibre infrastructure by purchasing the underground fibre in Lusaka and other commercial centres owned by Realtime in the final quarter of 2010. The total fibre network owned and operated by CEC now comprises 520km of fibre within the Copperbelt on power lines, and a further 250km of buried fibre throughout the country, mainly in the commercial centres. The network is currently being extended to cover new towns, including Livingstone, Kabwe and Solwezi.

The main customer base for the fibre is the banks, mining companies, mobile service providers and internet service providers that operate in Zambia. There is strong demand for fibre from these and other sectors, and the business is expected to grow steadily for the foreseeable future. Telecommunications is, by nature, a highly competitive and fast moving industry, and CEC’s objective is to operate effectively in the provision of fibre network services where it has a competitive advantage and is able to offer services to other entities with licenses issued by the regulatory authority, Zambia Information and Communications Technology Authority (ZICTA).

Realtime, which is operated as a joint venture under which CEC has a 50% interest, provides

direct services to customers. The main focus of Realtime is sales and customer service for corporate clients. The Realtime business operates in a manner that is complementary to CEC’s network fibre business.

Other Projects

The Company is investigating other opportunities to invest in the energy sector, both in Zambia and in other African countries.

The Company was awarded an international prize during the year for its development activities. The ‘Developer of the Year’ prize was given by African Investor.

The CEC Board has considered the possibility of establishing a special purpose vehicle to attract additional funding for development projects, so that the CEC balance sheet funding capacity is preserved in the interests of business prudence.

MICHAEL J TARNEY

29


Protecting our fellow human beings and the environment, and investing in communities around and beyond where we operate are at the core of the Company’s values to ensure our business and people are a positive influence on the community and the world through responsible behaviours, operations and service offerings.

Guided by our Corporate Social Responsibility policy, CEC pursues an integrated approach to corporate responsibility, ensuring consistency with the interests of our stakeholders.

CEC has traditionally supported education, health and young people. These form the Company’s core areas for social support and over the years, considerable resources have been invested in these key social development areas.

The major recipients and beneficiaries of CEC’s social investment have been children and young people. Orphans and vulnerable children are supported, for example, through construction of school infrastructure and provision of learning and teaching materials; improvement of the environment and facilities for children in, especially, public health institutions like the Kitwe Central Hospital.

The Company has constructed classroom blocks at a number of schools in Kitwe, which include CINDI’s Twashuka, St. Francis Community School

of Garnerton – which has since been turned into a Government-run high school, and rendered support to Mulenga Community School.

In-school and out-of-school youths alike have benefited from the Company’s support to sporting and recreational infrastructure and financing of teams across sports disciplines.

The flag carrier of CEC’s support and contribution to the development of sports in the country is the Power Dynamos Football Club – a Zambian premier league football side fully sponsored by CEC and whose record of achievement speaks to the unwavering investment and support rendered by the Company.

In 2010, the Company spent nearly US$59,000 in support of education and various sports activities outside of football.

The year’s major project was an infrastructure improvement and development project for Namwianga Christian Secondary School of Kalomo District in Southern Province, which received US$19,000 in money and ten units of used desktop computers for their computer laboratory under construction.

The structural refurbishment of the Arthur Davies Stadium, home of the Power Dynamos Football Club, which commenced in March 2009, was

Corporate Responsibility Report

30


completed in July 2010 with a total investment of US$860,000. Nearly US$504,000 was spent on the team itself in 2010 to cover their operational expenses.

CEC has entered into a Memorandum of Understanding with the two major institutions of higher education in Zambia – the University of Zambia (‘UNZA’) and Copperbelt University (‘CBU’) – to support capacity building in the areas of power systems engineering, electronics and telecommunications.

The Company refurbished the lecture theatres at UNZA in 2009, provided modern furniture and installed electronic projection equipment that can be linked to the network servers in the institution. This has been of great assistance to lecturers and students alike, as lectures can now be delivered using the advantages of modern technology.

CEC has seconded a senior manager to UNZA and CBU on a full time basis, for two years, to assist in designing new laboratories, and developing project curricula that are fit for purpose in today’s rapidly evolving industrial environment.

Furthermore, the Managing Director – Corporate Development has been chosen to Chair the Zambian section of the Education Partnership for Africa (EPA), a broad based initiative through which a partnership has been created between the University of Manchester in the United Kingdom, UNZA and CBU to enhance all aspects of curriculum development, staff and student training in key areas of engineering competence.

Another focus of the EPA programme is fund raising, through which large corporates are invited to provide financial support for capacity building at the institutions, and to offer tailored project work in industry during the final year of degree courses.

In addition to seconding a senior person to the universities, CEC has made provision to support the construction of a high voltage laboratory during 2011. As CEC intends to recruit students from both UNZA and CBU in future, the initiative will have the added benefit of ensuring that new recruits have the necessary training to be considered for recruitment to the Company’s graduate training programme.

31


In its planning for the future construction of the Kabompo Gorge Hydro Project, the Company has taken the local community to heart. The project will bring development to an area that currently lacks many essential amenities, such as access to electricity and the provision of health care.

The creation of sustainable economic activity in the area will enable the establishment of a new town, which will enable both the Government and non-government institutions to develop institutional support for the local community.

The Company has also committed to opening a representative office in Mwinilunga, the local District centre, through which communication with the local community will be co-ordinated.

Memoranda of understanding have been signed with the local chiefs, ensuring that all developments will be undertaken in consultation with the local community, through a defined process.

The plans for the local community include the design of a new small town to house those working at the power station, which will provide for:Improvements to the access road;

Construction of a clinic;Construction of a school;Construction of social facilities such as shops.

The Company intends to enter into partnerships with non-governmental organisations and relevant Government agencies to facilitate capacity building in the local community in the areas of skills training and capacity development of small businesses.

Through our corporate responsibility and social investment efforts, the Company seeks to impact communities in a manner that spreads the benefit of our support to as many of the affected people as possible within a community.

Sustainability of assistance plays a major role in the Company’s corporate responsibility decisions as does the fit of the required assistance to our corporate values, policies and shareholder interests.

We value and encourage the involvement of all staff in the Company’s efforts to uphold, respect and carry out its responsibilities as a corporate citizen to the best standards possible and to the full benefit of other citizens.

32


Acid Test Ratio

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2005 2006 2007 2008 2009 2010Year

Times

Debtor Days

-

10

20

30

40

50

60

70

2005 2006 2007 2008 2009 2010Year

No of Days

GP

-

10,000

20,000

30,000

40,000

50,000

60,000

2005 2006 2007 2008 2009 2010Year

Gross Profit

Return on Assets

0%

1%

2%

3%

4%

5%

6%

7%

2005 2006 2007 2008 2009 2010Year

Return on Assets

EBITDA

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2005 2006 2007 2008 2009 2010Year

EBITDA

Earnings Per Share

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2005 2006 2007 2008 2009 2010Year

EPS in Cents

Debtor Days

Acid Test Ratio

Gross Profit

Return on Assets

EBITDA

Earning Per Share

Operational / Financial Highlights

33


Revenue

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2005 2006 2007 2008 2009 2010YEAR

US$`000

Revenue

Profit Before Interest and Tax

0

5,000

10,000

15,000

20,000

25,000

2005 2006 2007 2008 2009 2010Year

US$`000

PBIT

Load

505 514 521 533

436

470

050

100150200250300350400450500550600

2005 2006 2007 2008 2009 2010YEAR

LOAD (MW)

Load

Revenue

Profit before Interest and Tax

Load

34


Directors’ ReportThe Directors have pleasure in submitting to the shareholders their report and the financial statements for the year ended 31 December 2010.

The Company’s principal business is the generation, transmission, distribution and sale of electricity and telecommunication service provision. In the quest to develop the telecommunication business, the Company signed a joint venture agreement with RTAA (Proprietary) Limited on 11th February 2009 to acquire a 50% interest in Realtime Technology Alliance Africa Limited (‘Realtime’).

Financial resultsThe turnover for the year was US$167 million (2009: US$154 million). The gross profit was US$46 million (2009: US$42 million). The Table below presents a financial summary of key indicators for the five year period to 2010.

Key Statistics 2010 2009 2008 2007 2006

Sales ($’000) 167,294 154,169 177,486 131,746 127,280

Gross profit ($,000) 45,856 42,371 49,526 38,746 37,383

Profit before interest and taxes ($,000) 19,602 19,126 17,222 13,306 12,745

Acid test ratio (Times) 0.76 0.95 1.26 1.24 0.67

Return on equity 8% 8% 26% 16% 12%

EBITDA ($,000) 30,293 28,682 26,419 22,152 21,293

Total assets ($,000) 277,585 274,711 178,977 150,745 131,453

Earnings per share (Cents) 1.27 1.19 1.01 0.73 0.79

Return on assets 4.6% 4.4% 5.7% 4.6% 6.0%

Net profit ($,000) 12,719 11,920 10,143 7,251 7,915

Equity ($,000) 160,992 158,273 39,573 45,630 65,680

Current assets ($,000) 36,316 36,500 53,579 35,151 17,395

Inventory ($,000) 3,462 3,506 3,443 1,307 1,136

Current liabilities ($,000) 43,466 34,847 39,786 26,149 24,332

Working capital

The Directors have noted the negative working capital position as at 31 December 2010 of US$7.1 million. Therefore, the directors have made arrangements to increase the company’s current assets by US$10 million during the first quarter of 2011 by securing a loan from Citibank Zambia. The term sheet for the loan was signed and approved on 1 December 2010. This facility is repayable over a period of 36 months in equal quarterly instalments. The pricing of the facility is LIBOR plus 3.375% and first draw down is expected in the first quarter of 2011.

35


Capital Expenditure

CEC’s capital expenditure programme has been developed in line with the Company’s strategy of minimizing business risks, enhancing customer satisfaction and ensuring future business activities.

In this regard, the major categories of expenditure include emergency generation equipment, transmission and distribution equipment, protection and metering equipment, safety health and environmental (SHE) equipment, IT, vehicles and communication and control equipment.

Through its continuous capital expenditure programme, CEC continually refurbishes its Gas Turbine Alternators (GTAs) to improve the reliability of standby power plant, replaces system assets that have reached the end of their useful lives and invests in equipment that ensures that the Company will meet required high standards for SHE compliance.

In addition to its planned capital expenditure for the maintenance, renewal and refurbishment of its network and associated facilities, CEC undertook further projects related to (i) installation of power factor correction equipment (US$2,473,000), (ii) telecommunication optic fibre procurement and installation (US$2,283,000), (iii) procurement of Konkola Expansion project spares (US$882,000) and (iv) Feasibility studies and preparatory works on the Kabompo Hydro project site US$1,388,000. The total capital expenditure for the year was US$13.761 million.

Insurance

The Company has insured its operational assets against all significant business risks. The Company also maintains insurance for its Directors in respect of their duties as Directors of the Company. Besides the foregoing, the Company has cover for employer’s liability, public and product liability, group personal accident, motor vehicle insurance and group life assurance. These policies are renewable and run from 1st May to 30th April of the following year.

Directors’ Report (Continued)

Dividends and transfer to reserves

The policy of the Company in respect of the payment of dividends is a matter to be determined by the Board in accordance with the principles outlined below:

The Company’s actual accumulated profits arising from the business of the Company in respect of each year after: -

(i) provision of working capital as determined by the Board;

(ii) transfers to reserves as in the opinion of the Board ought reasonably to be made;

(iii) service of all debts and full compliance with any financing agreements to which the Company is party at the relevant time of payment; and

(iv) taking into account the interests of the shareholders in minimizing taxation liabilities.

shall be distributed by the Company to the shareholders by way of dividend.

The Company has a policy of declaring dividends twice a year; in March and August. Dividends of US$6,000,000 and US$4,000,000 were paid on 26th March and 25th October, 2010 respectively. Retained profit taken to reserves at 31 December 2010 was US$12.7 m.

Operations

During the year, all purchases of electrical power were from Zesco Limited (ZESCO) under the Bulk Supply Agreement. Electricity supplies from this source accounted for 99.98% of the total requirements.

The operations of the Company’s high-voltage

36


transmission and distribution system were maintained to a satisfactory standard.

A total of two hundred and twenty-two (222) faults occurred on the system in 2010 compared with one hundred and ninety-two (192) in 2009. The increase was attributed to more lightning related faults. There were two occurrences which resulted in interruptions of power supply to the Chililabombwe area. In each case, a disturbance was experienced on the Societe National d’Electricite (SNEL) system in the Democratic Republic of Congo (DRC) and at Luano substation, the Michelo 220kV line protection operated and tripped the line. This resulted in the SNEL import being channelled through the Luano – Bancroft area and Avenue – Bancroft 66kV lines via Michelo substation causing an over-load situation.

There were 36 faults on 220kV, 83 on 66kV and 8 on 11kV transmission networks; 6 on 220kV Transformers; 49 on 66kV Transformers; 9 on Rotating Plant; 1 on 220kV Busbars; 2 on 66kV Busbars; 1 on 11kV Busbars; 3 Major faults; 3 over frequency conditions and 21 through faults.

A satisfactory security of supply from ZESCO was generally maintained through out the review period. However, there was an interruption of ZESCO power supply to the entire Copperbelt for 4 hours 55 minutes on 18th June 2010 as a result of a fault on the Zesco 330kV transmission network.

The efficiency of the annual bush clearing exercise was maintained. However, a total of eleven (11) faults were experienced on the Michelo – Karavia 220kV tie line due to bush fires on the Congolese section of the tie line. In the year 2009, nineteen (19) faults were experienced.

Thefts and vandalism of the Company’s installations continued to be a major cause of concern. There were 18 incidents during the review period compared with 31 in the year 2009. There were 7 tower steel member thefts; four

Directors’ Report (Continued)thefts of overhead copper conductors; two thefts of copper earthing conductors and two cases of vandalism in the review period. Repairs were carried out as incidents were reported.

The stringent security measures that have been employed have been working well so far, thus the security of the power system has not been compromised.

Directors

The Directors who served during the year and at the date of this report were as follows:

Hanson Sindowe ChairpersonJean Madzongwe Deputy Chairperson

Teddy J Kasonso Appointed on 8 February 2010

Neil CroucherMichael TarneyIrene L Ng’andweStandwell C MaparaAbel MkandawireEmmanuel MutatiMunakupya HantubaJonathan M Muke

Robert Chestnutt Appointed on 18 August 2010

Peter Mumba Retired on 8 February 2010

Helen Tarnoy Retired on 18 August 2010

With the exception of (i) Madison General Insurance Company Limited, who provide insurance services in which Abel Mkandawire is a Director and (ii) Mopani Copper Mines Plc, which is a large customer of the Company and in which Emmanuel Mutati is Chief Executive Officer, the Company did not enter into contracts with any Company where a Director has material interests.

37


Share Capital

The authorised share capital of the Company is US$100,001, divided as follows:

1,000,000,000 Ordinary shares of a par value of US $0.0001 each1 Special Share of US $1.00 held in the Company by the Government of the Republic of Zambia

As at 31 December 2010, the shareholding was as follows:Zambian Energy Corporation (Ireland) Limited

520,000,000

ZCCM Investments Holdings PLC 200,000,000Private Individuals/Institutions 280,000,000Government of the Republic of Zambia (Golden Share)

1 Special Share

Average number and remuneration of employees

The total remuneration of employees during the year amounted to US$14.5 million (2009: US$10.7 million) after the capitalisation of labour, and US$14.6 million (2009: US$12.4 million) before the capitalisation of labour, and the average total number of employees was as follows:

Month NumberJanuary 355February 358March 358April 359May 358June 358July 356August 356September 358October 359November 360December 360Average 358

Power Dynamos Football Club

CEC continues to sponsor Power Dynamos Football Club through a direct funding.

Industrial Relations

A sound industrial relations climate prevailed in the Company during the year and no work stoppages were experienced. The Company will continue to pursue proactive dialogue and partnership with the Mineworkers Union of Zambia (MUZ).

Developments

The Company’s total demand continued to recover over the period under review with electricity consumption by CEC’s customers having increased by 8% on a year by year basis. The energy sales for CEC’s mining customers increased from 3,338 GWh in 2009 to 3,640 GWh in 2010 while capacity sales went up from 453 MW at the beginning of the year to a high of 487 MW. The good copper price continues to spur on measureable demand ramp up by the Company’s customers particularly Konkola Copper Mines Plc (KCM), Mopani Copper Mines Plc (MCM), NFC Africa Mining (NFC) and CNMC – Luanshya Copper Mines (CNMC-CLM). CEC’s capacity sales were, however, still lower than the pre-financial crisis high of about 520MW mainly due to the Chambishi (COSAK) smelter, which remained under care and maintenance.

On the power wheeling front, domestic wheeling on behalf of ZESCO, the national power utility, through the CEC system recorded a marginal increase from 1,657 GWh in 2009 to 1,660 GWh in 2010. International wheeling, on the other, hand showed a slump due to expiration of some international power purchase agreements involving SNEL and Zimbabwe Electricity Supply Authority (ZESA), and SNEL and Eskom. It is expected that international wheeling will rebound as SNEL completes rehabilitation of its generation facilities to restore capacity and


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Developments (continued)

the interconnection between CEC and SNEL is expanded to make it more reliable.

CEC is pleased to report the successful extension by the Company of the terms of the NFCA and Chibuluma Mines Power Supply Agreements (PSA) by a further 15 years and 10 years respectively. These PSAs were due to expire by the end of 2012.

During the year, CEC also commissioned a Cost of Service study, which will review the cost involved in the provision of services by CEC. NETGroup Solutions (Pty) Limited, a South African based consultant has been contracted to carry out the study, which will help CEC, as a going business, to understand its ability to continue operating on a commercial basis for the foreseeable future.

Various customer expansion projects were also commenced during the year. These include Muliashi by CNMC-CLM, Konkola North Mine by KONNOCO, Synclinorium by MCM and CRO by KCM. Upon completion, these projects will result in power sales increase of at least 107MW.

The feasibility study to develop the Kabompo Gorge Hydro project, which commenced in 2009 was completed in June 2010, with a recommendation that an underground power station of up to 40MW is viable. As part of this study, the Environmental Impact Assessment (EIA) for the power station site was completed in December 2010. Results from both studies are satisfactory with no major fatal flaws reported. Therefore, work to develop the project ownership structure and capital raising alternatives leading to Financial Closure are already in progress, with Greengate LLC (USA) and GeorgeBaison & Obed Consulting Limited (GBO Zambia) appointed as financial and tax advisers respectively. A final report of the EIA is due to be submitted to Environmental Council of Zambia during the first quarter of the year 2011, following their comments on the draft EIA report. Assessment

of the cost of the power transmission line from Kabompo Gorge station to the nearest ZESCO substation and an associated EIA have also commenced. The requirement of the transmission line is critical in the project schedule as the line will also be used to purchase power (from ZESCO) required during construction of the power station. In the meantime, a Consultant is starting the preparation of Engineering, Procurement and Construction (EPC) Tender documentation as the shortlisting of potential EPC contractors from a recent Expression of Interest is being finalized. The project plan is to have an EPC tender for power station construction by second quarter of 2011.

Gifts and Donations

In 2010, the donations totaled US$59,000 with the education sector being the major recipient, in keeping with the Company’s corporate responsibility priorities.

CEC seconded a senior manager to the University of Zambia to design new high voltage laboratories, and assist in curriculum development at the institution.

A deliberate decision was taken to look outside the areas that have traditionally received support from CEC – the Copperbelt Province and lately Lusaka. Hence, Namwianga Christian Secondary School of Kalomo District in Southern Province received monetary assistance and used desk top computers, all worth over US$19,000.

Refurbishment of the Arthur Davies Stadium, which began in 2009, was completed and the stadium recommissioned at the end of July 2010.

The Company also supported the Zambia Open Golf tournament and numerous other golf tournaments in which staff participated, mainly for fundraising purposes.

Other donations made during the year were insupport of initiatives by bodies in commerce and industry, specifically the Kitwe and District


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Gifts and donations (continued)

Chamber of Commerce and Industry, the Zambia Association of Chambers of Commerce and Industry and the Lusaka Stock Exchange; all of which CEC is a member.

Safety and Health Matters

In 2010, the company continued with its efforts to strive for SHE Excellence. The company adopted the SHE Cultural change once again as the top most SHE driver for 2010.

A good SHE Performance was achieved. The Performance was mostly driven by the desire by all concerned to drive the implementation of the CEC SHE Culture Change Journey. This is a journey we embarked on back in December 2008 after the SHE training for Directors and Managers.

Achievement of this performance was further attributed to management oversight provided to SHE issues during the year, especially the top driver aimed at improving SHE statistics.

The implementation of the Safety Toolbox Talk Strategy resulted in the delivery of an overwhelming 1,118 Toolbox Talks aimed at proactively discussing, identifying and agreeing the corrective action measures for operation and maintenance tasks before they are undertaken. This was effectively implemented in that we saw a reduction in the number of Lost Time Accidents (LTAs) from four (4) in 2009 to one (1) in 2010, after going 1.3 million man-hours without an LTA.

We further saw a reduction in the number of system breaches and permit withdraws from three (3) each in 2009 to two (2) each in 2010, respectively.

There was also focus on Managers’ SHE Visibility Tours and Inspections aimed at demonstrating Management commitment and involvements.

The Company demonstrated its commitment to ensure that a non-discriminatory environment

is provided for persons infected and affected by HIV and AIDS by continuing the provision of free antiretroviral medication, Training for peer educators and psychosocial counselors and support for community-based HIV and AIDS programmes. The Company has so far spent a total of US$105,000 on the HIV and AIDS programme since its inception in 2002. The Company further continued with its annual rollback malaria programmes.

Environmental Matters

In 2010, twenty one licenses (21) were issued to CEC by the Environmental Council of Zambia (ECZ). The licenses covered air emissions, transportation and disposal of municipal waste; generation of hazardous waste; transportation of hazardous waste; storage of hazardous waste and handling of ozone depleting substances. All the licenses were valid from 1st January to 31st December 2010.

Gas Emissions

During the year 2010, the Senior Manager - Emergency Power was responsible for air emission monitoring activities at all the four GTA plants under CEC. Gas emission levels for the emergency power plants were monitored and emission results obtained during the year were below the statutory emission limits. Full compliance was also achieved for the submission of statutory reports covering air emissions.

Waste Management

During the period under review, CEC did not record any prosecution or fines related to transportation and disposal of domestic waste; generation, transportation and storage of hazardous waste.

325 tons (65 loads) of domestic waste was collected and disposed of during the year under review.


40


126 X 210 litres drums of waste oil was generated and disposed of through our registered contractors.

Statutory Reporting

CEC submitted two statutory reports to the Environmental Council of Zambia (ECZ) during the year under review. One semi-annual environmental statutory report covered the period from January to June 2010, while the second semi-annual report covered the period from July to December 2010. Above 100% compliance was recorded with regard to submission of statutory reports during the year.


41


Statement on Corporate Governance For The Year Ended 31 December 2010

In recognition of the importance of conducting its affairs with integrity, in accordance with generally accepted good corporate practice, CEC remains resolute in its commitment to the principles of integrity, openness and accountability. The Company fully supports the principles of good corporate governance espoused in the Lusaka Stock Exchange (LuSE) Corporate Governance Code (which Code is in line with internationally accepted norms).

CEC has in this regard, adopted the practice of annual Board Assessment outlined in the LuSE Corporate Governance Code. This enables the Board to assess the performance of both the Board as a body and that of its individual Directors. The Company’s corporate governance philosophy encompasses not only regulatory and legal requirements such as those under the LuSE Corporate Governance Code but also several voluntary practices at a high level of business ethics, effective supervision and enhancement of shareholders’ value.

During the year under review, the Board membership comprised twelve (12) Directors, three of whom were Executive Directors and the others were Non-Executive Directors. The Board has three independent Non-Executive Directors in its membership, whose appointment is undertaken by all Shareholders. The Board has an Executive Chairperson and a Non-Executive Deputy Chairperson in accordance with the Company’s Articles of Association and the LuSE Code of Corporate Governance. The Board has considerable depth of knowledge and experience collectively gained from both the public and private sectors and also represents the respective shareholding groups.

The Board meets at least once in a quarter to review the quarterly results and other important business of the Company set out in the agenda. The members of the Board have access to all relevant information of the Company.

During the year under review, the Board meetings of the Directors were held on:

17th February 2010, 19th May 2010, 18th August 2010 and 24th November 2010. During the year, two Directors – Peter Mumba and Helen Tarnoy – representing the Government of the Republic of Zambia – Special Shareholder and Zambian Energy Corporation (Ireland) Limited respectively; retired from the Board and were replaced by Teddy Kasonso and Robert Chestnutt.

Board Committees

The Board has established Committees to oversee various aspects of the Company’s business and operations. The Board has delegated its authority on certain defined areas to these Committees. The Committees are comprised of Executive Directors, Non-Executive Directors and Senior Management. The meetings of the respective Committees are chaired by a Non-Executive Director apart from the Nominations Committee. Reports of Committee meetings are submitted at each Board meeting.

Executive Committee

The Board of Directors has an Executive Committee whose role is to oversee the major operations of the business including key customer issues, stakeholder management, financial performance, capital projects and management issues. The Committee comprises six members and is chaired by Jean Madzongwe, the Deputy Chairperson of the Board.

Audit Committee

The Audit Committee continued to provide oversight on the effectiveness of CEC’s systems in the areas of financial reporting, risk management, compliance management as well as other internal

42


control activities in the company. During the year, the Committee reviewed and recommended the financial statements for Board approval. The Committee also reviewed and approved internal audit reports covering eight functional areas within CEC.

In line with their responsibilities and the requirements of good corporate governance, the Committee carried out an evaluation of the performance of the External Auditor, reviewed the Internal Audit Charter as well as the Committee’s own Charter. The Internal Audit and Audit Committee Charters were subsequently approved by the Board. The Committee comprises four members, who are all Non-Executive Directors and is chaired by Jonathan Muke.

Remuneration and Employee Development Committee

The Committee oversees employee remuneration and Mine workers Union of Zambia (MUZ) wage negotiations, key organisational changes, pension scheme arrangements and employee development policies. The Committee comprises four members and is chaired by Munakupya Hantuba.

Safety, Health and Environment 2010 SHE Committee

The Committee’s key mandate is to ensure that management of Safety, Health and Environmental (SHE) matters in the Company is aligned with the overall business strategy of the Company and is geared towards attainment of its commitments and obligations in these fields. In order to attain this mandate in 2010, the Committee focused on quarterly reviews of the safety, health and environmental performance of the Company. Further, the Committee spearheaded the development of and compliance with best practice and all applicable

legislation on SHE and suggested best practice SHE reporting methodologies.

The Committee comprises three Non-Executive Directors and five members of senior management including the two CEC Managing Directors. The Committee is chaired by Emmanuel Mutati.

During the year under review, the committee examined and endorsed the 2009 SHE Performance Report. The Committee reviewed and approved the 2010 Corporate SHE Performance Targets. The Committee further examined all the significant SHE incidents during the year under review and followed through the recommended actions from the incidents until full closure.

The Committee approved and monitored on a quarterly basis, the implementation of the 2010 CEC SHE Top Drivers that were Improving the CEC SHE Culture through provision of safety, health and environmental training to all employees under the theme “Employees Roles and Responsibilities in achieving a SHE Cultural Change” and to Operationalize Safety Health and Environment aspects of the business.

The Committee also monitored the achievement and delivery of a number of regulatory and environmental milestones regarding the Kabompo Hydro Power Generation Project.

Nominations Committee

The Committee is tasked with the responsibility of considering appointments to the Board and its Committees and making recommendations for approval of the Directors or Shareholders, where a Director is appointed under 14.4 of the Articles of Association of the Company. The Committee is chaired by the Chairperson of the Board, Hanson Sindowe, with representatives from the Executive and Non–Executive Directors.

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Business Development Committee

A Business Development Committee was established before the close of the year to undertake the task of reviewing the Company’s new business development projects.

Auditors

At the last Annual General Meeting of the shareholders of the Company, Messrs Grant Thornton were appointed as auditors of the Company.

In accordance with the Company’s Articles of Association, Messrs Grant Thornton will retire as auditors of the Company at the conclusion of the forthcoming Annual General Meeting.

Messrs Grant Thornton offer themselves for re-election.

By order of the Board

Julia C Z ChailaCompany Secretary

Kitwe

Date: 23 February 2011

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Section 164 (6) of the Companies Act Cap 388 of the Laws of Zambia requires the Directors to prepare financial statements for each financial year, which give a true and fair view of the financial position of Copperbelt Energy Corporation PLC and of its financial performance and its cash flows for the year then ended. In preparing such financial statements, the Directors are responsible for:

• designing,implementingandmaintaininginternal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement;

• selectingappropriateaccountingpoliciesand applying them consistently;

• makingjudgementsandaccountingestimates that are reasonable in the circumstances; and

• preparingthefinancialstatementsinaccordance with International Financial Reporting Standards, and on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time, the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act Cap 388. They are also responsible for safeguarding the assets of the Company, hence taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of Directors’ ResponsibilitiesThe Directors confirm that in their opinion

(a) the financial statements give a true and fair view of the financial position of Copperbelt Energy Corporation PLC as of 31 December 2010, and of its financial performance and its cash flows for the year then ended;

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when these fall due; and

(c) the financial statements are drawn up in accordance with International Financial Reporting Standards.

This statement is made in accordance with a resolution of the Directors.

Signed at Lusaka on 23 February 2011

Director Hanson Sindowe

Michael J. TarneyDirector

DirectorJonathan Muke

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Report of the Independent Auditors to the Members of Copperbelt Energy Corporation Plc

Report on the Financial StatementsWe have audited the accompanying financial statements of Copperbelt Energy Corporation PLC, which comprise the statement of financial position as at 31 December 2010, and statement of comprehensive income, statement of changes in equity, and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ responsibility for the financial statementsAs described on page 13, the Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements give a true and fair view of the financial position of Copperbelt Energy Corporation PLC as of 31 December 2010, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Emphasis of matterWe draw attention to note 2 to the financial statements, which indicates that the Company’s current liabilities exceeded the current assets by US$7.1 million and describes the assumptions made in preparing these financial statements on a going concern basis. Our opinion is not qualified in respect of this matter.

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Report on Other Legal and Regulatory RequirementsIn our opinion, the financial statements of Copperbelt Energy Corporation PLC as of 31 December 2010 have been properly prepared in accordance with the Companies Act 1994, and the accounting and other records and registers have been properly kept in accordance with the Act.

Chartered Accountants

Wesley M BeenePartner

Lusaka

Date: 23 Feruary 2011

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Financial Statements31 December 2010

48


Statement of Comprehensive Income For The Year Ended 31 December 2010

2010 2009 Notes US$’000 US$’000

Revenue 6 167,294 154,169

Cost of sales (121,438) (111,798)

Gross profit 45,856 42,371

Other operating income 7 5,125 6,132

Operating expenses 8 (35,213) (30,697)

Results from operating activities 15,768 17,806

Finance income 8 599 1,065

Finance expense 11 (1,144) (1,815)

Net finance cost (545) (750)

Profit before tax 15,223 17,056

Income tax expense 12(a) (4,996) (5,994)

Profit for the year 10,227 11,062

Other Comprehensive Income:

Gross gains/(loss) on cash flow hedges 3,834 1,320

Income tax relating to other comprehensive income 12(a) (1,342) (462)

Total comprehensive income for the year 12,719 11,920

Earnings per shareWeighted basic and diluted earnings per share (cents) 13 1.27 1.19

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Statement of Change of Equity For The Year Ended 31 December 2010

Share capital

Share premium

Revaluation reserve

Retained earnings Total

US$’000 US$’000 US$’000 US$’000 US$’000

Balance at 31 December 2008

As previously stated 100 148 - 39,325 39,573

Prior year adjustment - - - 3,700 3,700

As restated 100 148 - 43,025 43,273

Revaluation increase - - 113,080 - 113,080

Comprehensive income for the year - - 11,920 11,920

Dividend paid - - - (10,000) (10,000)

Balance at 31 December 2009 100 148 113,080 44,945 158,273

Release of extra depreciation - - (886) 886 -

Comprehensive income for the year - - - 12,719 12,719

Dividend paid - - - (10,000) (10,000)

Balance at 31 December 2010 100 148 112,194 48,550 160,992

(a) Retained earnings are the carried forward recognised income, net of expenses, of the company plus current year’s profit attributable to shareholders.

(b) The share premium relates to the excess amounts received on the issue of share capital net of pre-incorporation costs.

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Statement of Financial Position As at 31 December 2010

2010 2009Notes US$’000 US$’000

ASSETSNon-current assetsProperty, plant and equipment 14(a) 239,269 236,211Investments in joint venture 15 2,000 2,000 241,269 238,211Current assetsInventories 16 3,462 3,506Trade and other receivables 17 24,060 30,695Cash and cash equivalents 18 8,794 2,299 36,316 36,500Total assets 277,585 274,711

EQUITY AND LIABILITIESEquity Issued capital 19 100 100Share premium 148 148Revaluation Reserve 112,194 113,080Retained earnings 48,550 44,945 160,992 158,273Non-current liabilitiesInterest-bearing loans 20 24,944 32,103Non-current trade and other payables 21 11,180 13,266Provisions 22 - -Deferred employee benefits 23 3,946 2,809Deferred tax liability 12(e) 33,057 33,413 73,127 81,591Current liabilitiesCurrent portion of interest-bearing loans 21 7,159 7,159Trade and other payables 24 34,468 24,575Amounts due to related party 25(i) - 1,430Tax payable 12(c) 1,839 1,683 43,466 34,847Total liabilities 116,593 116,438Total equity and liabilities 277,585 274,711

The financial statements on pages 16 to 48 were approved by the Board of Directors on 23 February 2011 and were signed on its behalf by: ) H Sindowe ) Director ) ) J Muke ) Director ) ) M Tarney ) Director

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Statement of Cash FlowsFor The Year Ended 31 December 2010

2010 2009

US$’000 US$’000

Cash flow from operating activities

Profit before taxation 19,057 18,376

Depreciation 10,690 9,556

Interest expense 1,144 1,815

Interest income (599) (1,065)

Profit on disposal of assets (23) (89)

Cash inflows before working capital changes 30,269 28,593

Decrease in trade and other receivables 6,635 3,127

Decrease/(increase) in inventories 44 (63)

Increase/(decrease) in payables 8,463 (5,486)

Decrease in provisions (1,137) (4,154)

44,274 22,017

Interest paid (1,305) (2,297)

Income tax paid (6,534) (8,062)

Net cash inflows on operating activities 36,435 11,658

Investing activities

Acquisition of property, plant and equipment (13,761) (7,332)

Investment in a joint venture - (2,000)

Proceeds from disposals of assets 36 132

Interest received 599 859

Net cash outflows from investing activities (13,126) (8,341)

Financing activities

Repayment of loans (7,159) (6,959)

Dividends paid (10,000) (10,000)

Net cash outflow from financing activities (17,159) (16,959)

Net decrease in cash and cash equivalents 6,150 (13,642)

Cash and cash equivalents at 1 January 2,299 16,314

Exchange loss 345 (373)

Cash and cash equivalents at 31 December 8,794 2,299

Represented by:

Bank balances and cash 8,794 2,299

Bank overdrafts - -

8,794 2,299

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Notes to the Financial Statements31 December 2010

1. The Company Copperbelt Energy Corporation PLC is a company domiciled in Zambia. The Company’s principal

business is the generation, transmission, distribution and sale of electricity.

2. Basis of preparing the financial statements – going concern assumption At the reporting date, the Company’s current liabilities exceeded the current assets by US$7.1

million. The company meets its day to day working capital requirements through funds generated from its operations.

The financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operational existence for the foreseeable future.

The validity of this assumption depends on the Company being able to generate sufficient funds from its future activities to meet its working capital requirements and that the Directors have made arrangements to increase the Company’s current assets by US$10 million during the first quarter of 2011 by securing a loan from Citibank Zambia. The term sheet for the loan was signed and approved on 1 December 2010. This facility is repayable over a period of 36 months in equal quarterly installments. The pricing of the facility is LIBOR plus 3.375% and first draw down is expected in the first quarter of 2011.

If the Company were unable to continue in operational existence for the foreseeable future, adjustments would have to be made to reduce the values of assets to their recoverable amounts, to provide for further liabilities that might arise and to reclassify property, plant and equipment and long term liabilities as current assets and liabilities.

The Directors have reviewed the effects of the matter mentioned above and having considered the measures put in place by management to address the deficit, the Directors believe that it is appropriate for the financial statements to be prepared on a going concern basis.

3. Principal accounting policiesThe principal accounting policies applied by the Company in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of presentationThe financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements are presented in accordance with IAS 1 “presentation of financial statements” (Revised 2007). The Company has elected to present the “Statement of Comprehensive Income” in one statement a “Statement of Comprehensive Income”. They have been prepared under the historic cost convention, as modified by the revaluation of financial assets and liabilities at fair value through profit and loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree

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3. Principal accounting policies (continued)

(a) Basis of presentation (continued)

of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4.

(i) Amendments to published standards effective in 2010 In 2009, the following new and revised standards and interpretations became effective for the first time and have been adopted by the Company, where relevant to its operations. The comparative figures have been restated as required, in accordance with the relevant requirements:

IFRS 3 (Revised 2008) - Business combinations

IAS 27 (Revised 2008) - Consolidated and separate financial statements

Improvements to IFRSs 2009 - Annual improvements

The Improvements to IFRSs 2009 made several minor amendments to IFRSs. The only amendment relevant to the Company relates to IAS 17 Leases. The amendment requires that leases of land are classified as finance or operating by applying the general principles of IAS 17. Prior to this amendment, IAS 17 generally required a lease of land to be classified as an operating lease. The Company has reassessed the classification of the land elements of its unexpired leases at 1 January 2010 on the basis of information existing at the inception of those leases and has determined that none of its leases require reclassification.

(ii) Interpretations to published standards that are not yet effective and have not been early adopted by the company:

The following new interpretations to existing standards have been published and are mandatory for the Company’s accounting periods beginning on or after 1 January 2009 or later periods but the Company has not early adopted or are not relevant for the Company’s operations:

Standard or Interpretation Effective for reporting periods starting on or after

IFRS 9 Financial instruments (to replace IAS39) 1 January 2013

Annual improvements 2010 1 July 2010

Notes to the Financial Statements (continued)

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Most of these amendments become effective reporting date in annual periods beginning on or after 1 July 2010 or 1 January 2011. The 2010 Improvements amend certain provisions of IFRS 3 Revised, clarify presentation of the reconciliation of each of the components of other comprehensive income and clarify certain disclosure requirements for financial instruments.

Based on the Company’s current business model and accounting policies, management does not expect material impact on its financial statements when the standards or interpretations become effective.

The Directors have assessed the relevance of these amendments and interpretations with respect to the Company’s operations and concluded that they may not be relevant to the company based on the current operations.

(b) Revenue recognitionRevenue in respect of supply of electricity is recognised upon delivery of power for a given period to customers.

(c) Property, plant and equipmentProperty, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

If a revaluation is undertaken, increases in the carrying amount arising on revaluation of property, plant and equipment are credited to the revaluation surplus in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year, the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset’s original cost, net of any related deferred income tax, is transferred from the revaluation surplus to retained earnings.

Depreciation is calculated to write off the cost of property, plant and equipment on a straight line basis over the expected useful lives of the assets concerned. The principal annual rates used for this purpose are:


55



%

Properties 2

Transmission and Distribution network 1.5 – 8.33

Motor vehicles 20

Office equipment, furniture and fittings 20 Capital work in progress is not depreciated.

The assets’ residual values and useful lives are reviewed at each balance sheet date and adjusted if appropriate.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount. These are included in the income statement in the other operating income. When revalued assets are sold, the amounts included in the revaluation surplus relating to these assets are transferred to retained earnings.

(d) Financial assets

The company classifies its investments into the following categories: financial assets at fair value through income, debtors and receivables, held-to-maturity financial assets and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired.

Management determines the classification of its investments at initial recognition and re-evaluate this at every reporting date.

(i) Financial assets at fair value through incomeThis category has two sub-categories: financial assets held for trading and those designated at fair value through profit or loss at inception.

A financial asset is classified into the ‘financial assets at fair value through income’ category at inception if acquired principally for the purpose of selling in the short term, if it forms part of a portfolio of financial assets in which there is evidence of short term profit taking, or if so designated by management.

Financial assets designated as at fair value through profit or loss at inception are those that are: held in internal funds to match investment contracts liabilities that are linked

to the changes in fair value of these assets. The designation of these assets to be at fair value through profit or loss eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases;


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(d) Financial assets (continued) managed and whose performance is evaluated on a fair value basis. Assets

that are part of these portfolios are designated upon initial recognition at fair value through profit or loss.

(ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable

payments that are not quoted in an active market other than those that the Company intends to sell in the short term or that it has designated as at fair value through income or available for sale. Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of debtors and receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to their original terms.

(iii) Held-to-maturity financial assetsHeld-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities other than those that meet the definition of debtors and receivables that the Company’s management has the positive intention and ability to hold to maturity. These assets are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment is established when there is objective evidence that the company will not be able to collect all amounts due according to their original terms.

(iv) Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories.

Financial assets are derecognised when the rights to receive cash flows from them have expired or where they have been transferred and the company has also transferred substantially all risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and held-to-maturity financial assets are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the income statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available for sale are recognised in equity. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as net realised gains or losses on financial assets.

Interest on available-for-sale securities calculated using the effective interest method is


57



recognised in the income statement. Dividends on available-for-sale equity instruments are recognised in the income statement when the Company’s right to receive payments is established.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active, the Company establishes fair value by using valuation techniques.

(e) Impairment of assets(i) Financial assets carried at amortised cost

The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Objective evidence that a financial asset or group of assets is impaired includes observable data that comes to the attention of the Company about the following events:

significant financial difficulty of the issuer or debtor;

a breach of contract, such as a default or delinquency in payments;

(e) Impairment of assets (continued)(i) Financial assets carried at amortised cost (continued)

it becoming probable that the issuer or debtor will enter bankruptcy or other financial reorganisation; or

observable data indicating that there is a measurable decrease in the estimated future cash flow from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the company, including:

• adversechangesinthepaymentstatusofissuersordebtorsinthecompany; or

• nationalorlocaleconomicconditionsthatcorrelatewithdefaultsonthe assets in the Company.

The Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.


58



If there is objective evidence that an impairment loss has been incurred on debtors and receivables or held-to-maturity investments carried at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement. If a held-to-maturity investment or a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under contract.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognised in the income statement.

(e) Impairment of assets (continued)

(ii) Financial assets carried at fair valueThe Company assesses at each balance sheet date whether there is objective evidence that an available-for-sale financial asset is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and current fair value, less any impairment loss on the financial asset previously recognised in profit or loss – is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not subsequently reversed. The impairment loss is reversed through the income statement, if in a subsequent period the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.

(iii) Impairment of other non-financial assetsAssets that have an indefinite useful life, for example land, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

(f ) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is calculated on a weighted average basis and includes all expenditure incurred in bringing the


59



inventories to their present location and condition. Net realisable value is the price at which inventory can be realised in the normal course of business and takes into account all directly related costs to be incurred in marketing, selling and distribution. Provision is made for obsolete, slow moving and defective inventories.

(g) Cash and cash equivalentsCash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments and balances held with banks.

(h) BorrowingsBorrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

(i) Borrowing costsBorrowing costs, being interest payable on loans directly attributable to the acquisition, production or construction of qualifying assets that need a substantial period of time to get ready for their intended use are capitalised.

(j) Short/long term indebtednessShort term indebtedness includes all amounts due to be repaid within twelve months from the date of the balance sheet, including instalments due on loans of longer duration. Long term indebtedness represents all amounts repayable more than twelve months from the date of the balance sheet.

(k) Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. Tax

currently payable is based on the results for the year as adjusted for items, which are non-assessable or disallowed for tax purposes.

Deferred taxation liabilities are recognised for all taxable temporary differences. Temporary differences can arise from the recognition for tax purposes of items of income or expense in a different accounting period from that in which they are recognised for financial accounting purposes. The tax effect of these temporary timing differences is computed by applying enacted statutory tax rates to any differences between carrying values per the financial statements and their tax base, and accounted for as deferred tax.

Deferred taxation assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised.

(l) Foreign currencies(i) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates (the ‘functional


60



currency’). The financial statements are presented in United States Dollars, which is also the company’s functional currency.

(ii) Transactions and balances Other currency transactions are translated into the functional currency using

the rates of exchange prevailing at the date of transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in other foreign currencies are recognised in the income statement.

Translation differences on non-monetary items, such as equity at fair value through profit and loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in fair value reserve in equity.

(m) Employee benefits

(i) Pension obligations All local employees below 55 years are registered with the statutory defined contribution pension scheme. A defined contribution scheme is a pension plan under which the Company pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees’ benefits relating to employee service in the current and prior periods. For the defined contribution scheme, the company makes mandatory contributions to the National Pension Scheme Authority. These contributions constitute net periodic costs and are charged to the income statement as part of staff costs in the year to which they relate. The Company has no further obligation once the contributions have been paid.

Secondly, there is a defined contribution pension scheme, the assets of which are held in a separate trustee-administered fund. The pension scheme is funded by contributions to the pension scheme. The contributions by the company are charged to the income statement in the period to which the contributions relate. The Company contributes 10.7% and the employees 5% of the employee’s basic salary towards the scheme.

(ii) Deferred employee benefitsThe expected costs of providing post-retirement benefits under defined benefits arrangements relating to employees service during the period are charged to the statement of income. Any actuarial assumptions are recognized immediately in the statement of income. In all cases, the pension costs are assessed in accordance with the advice of independent qualified actuaries but require the exercise of significant judgements in relation to assumptions for future salary and pension increases, long term price inflation and investment returns. While management believes the assumptions used are appropriate, a change in assumptions would impact the earnings of the Company.


61



(n) ProvisionsProvisions are recognised when: the Company has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

(o) Dividend distributionDividend distribution to the Company’s shareholders is recognised as a liability in the financial statements in the period in which the dividends are approved by the Company’s shareholders.

(p) Investments Investments are stated at cost.

(q) Environmental costsThe Company is subject to various regulations and environmental costs are charged to the income statement as they are incurred.

(r) Ordinary sharesOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

(s) Earnings per shareThe Company presents weighted basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by diving the profit or loss attributable to the shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

(t) Lease of landLeases of land are classified as operating leases on the basis that although land has infinite economic life and the right to use the land passes on acquisition, ownership has a fixed lease term of 99 years, or the unexpired portion thereof. Upfront payments made to obtain the right to use the land are capitalised as a lease prepayment and recognised on a straight line basis over the unexpired portion of the lease as an operating lease expense.

(u) Segment reportingA segment is a distinguishable component of the Company that is engaged either in providing products or services within a particular economic environment (geographical


62


segment), which is subject to risks and rewards that are different from those of other segments. Segment revenue is based on the geographical location of customers.

4. Critical accounting estimates and judgementsThe Company makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In the process of applying the Company’s accounting policies, management has made judgements in determining:

(a) the classification of financial assets;(b) whether assets are impaired;(c) estimation of provision and accruals; and(d) recoverability of trade and other receivables.

5. Management of financial risk5.1 Financial risk

The Company is exposed to a range of financial risks through its financial assets and financial liabilities. The most important components of this financial risk are interest rate risk and credit risk.

These risks arise from open positions in interest rate and business environments, all of which are exposed to general and specific market movements.

The Company manages these positions with a framework that has been developed to monitor its customers and return on its investments.

5.1.1 Credit riskThe Company has exposure to credit risk, which is the risk that a counter party will be unable to pay amounts in full when due. The key area where the Company is exposed to credit risk is amounts due from customers.

The Company’s exposure to credit risk is influenced mainly by individual characteristics of each customer. The demographics of the Company’s customer base, including the default risk of the industry and country, in which customers operate, has less of an influence on credit risk. Approximately 36% of the Company’s revenue is attributable to sales transactions with a single customer.

The Company enters into Agreements with new customers, each customer is analysed individually for creditworthiness before credit terms and conditions are offered. The Company’s review includes trade references from other suppliers, when available, and in some cases bank references. Credit limits are established for each customer, which represents the maximum open amount without requiring approval from the senior management; these limits are reviewed annually. Customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company only on a cash basis.


63


5. Management of financial risk( continued)

5.1 Financial risk (continued)

5.1.1 Credit risk (continued)

All the Company’s customers have been transacting with the Company for over five years, and losses have occurred infrequently. In monitoring customer credit risk, customer supplies are within the predetermined credit limits, and further supplies are restricted if amounts remain outstanding for more than 60 days regardless of the amount. Trade and other receivables relate mainly to the Company’s mining customers and other legal entity customers that account for 99% and 1% respectively. Customers that are graded as “high risk” are those for whom outstanding amounts exceed 60 days, and such customers are placed on a restricted customer list, and future electricity supplies are restricted.

The Company does not require collateral for trade and other receivables.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main component of this allowance relates to individually significant exposures, and a collective loss component is established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment of statistics for similar financial assets.

5.1.2 Liquidity riskLiquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company uses activity-based costing to cost its products and services, which assist it in monitoring cash flow requirements and optimizing its cash return on investments. Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.


64


5. Management of financial risk (continued)

5.1 Financial risk (continued)

5.1.3 Market riskMarket risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

5.1.4 Currency riskThe Company is exposed to risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the company, namely the US Dollar. The currencies in which these transactions are primarily denominated are the Zambian Kwacha and South African Rand.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company ensures that the risk is kept to an acceptable level by matching assets and liabilities in the balance sheet. Net exposure is kept to an acceptable level by denominating recognized trade receivables in United States Dollars.

5.1.5 Interest rate riskThe Company is exposed to interest rate risk to the extent of the balance of the bank accounts and loans.

5.1.6 Capital managementThe Board’s policy is to maintain a strong capital base so as to maintain creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the key financial performance indicators of the Company. The Board reviews the statutory accounts by comparing the actual results against budget and prior year. The Company’s target is to achieve growth in respect of sales, gross profit and profit before tax.

There were no changes in the Company’s policy to capital management during the year.


65


2010 2009 US$’000 US$’000

6. Revenue by business segment Electricity transmission 156,324 142,841

Wheeling – domestic 10,170 10,612Wheeling – international 442 497Rural electrification 358 219 167,294 154,169

7. Other operating income Capital charge 1,523 1,498 Telecoms income 1,359 339 Write back of provision no longer required 904 3,786 Sundry income 1,339 509 5,125 6,132

8. Operating expenses Depreciation 10,690 9,556 Personnel and staff related costs (note (8)) 14,483 10,700 Non-executive directors’ fees and benefits 132 117 Auditors’ remuneration – audit services 42 46 Tax services 10 9 Insurance costs 1,503 1,467 Stores and maintenance 2,473 1,667 Football expenses 504 411 Bad debts provision (476) (1,546) Other operating expenses 5,852 8,270 35,213 30,697

9. Personnel and staff related costs Salaries and wages 9,849 6,127

Retirement benefits 582 538Pension contributions and similar costs 2,104 1,230Other staff costs (overtime, shift differential, housing and bonuses) 1,948 2,805 14,483 10,700

10. Finance incomeInterest on overdue debtors 485 815Bank interest 114 250 599 1,065

11. Finance expensesInterest on bank loans 861 1,625Interest on overdue creditors 283 190 1,144 1,815


66


2010 2009 US$’000 US$’000

12. Income tax expense(a) Charge for the year:

Income tax on taxable profit @ 35% (2009 @ 35%) 6,696 5,644 Deferred taxation (358) 812 6,338 6,456

(b) Reconciliation of the tax charge:

Profit before taxation 19,057 18,376

Taxation at current rate on accounting profit 6,670 6,432 Permanent differences:Disallowable expenses (97) -Profit on disposal of assets (8) (31) Timing differences: Capital allowances and depreciation (227) 55Tax charge 6,338 6,456

(c) Movement in taxation payable account:

At the beginning of the year 1,683 1,236 Charge for the year (note 12(a)) 6,696 5,644 Exchange differences (6) (435) Release of Provision - 3,300 Payments made during the period (6,534) (8,062)

At the end of the year 1,839 1,683

(d) Income tax assessments have not yet been agreed with the Zambia Revenue Authority (ZRA) for the period ended 31 December 2010. A self-assessment system for income tax was introduced for periods subsequent to 31 March 2004. Income tax returns have been filed with the ZRA for the period ended 31 December 2010. Quarterly tax returns for the year ended 31 December 2010 were made on the due dates during the year.

2010 2009 US$’000 US$’000 (e) Deferred taxation

This represents: Accelerated tax allowances 33,167 32,639Unrealised exchange losses (110) 774 33,057 33,413

Analysis of movement:

At the beginning of the year 33,415 32,601Provision made during the year (note 11(a)) (358) 812At the end of the year 33,057 33,413


67


13. Earnings per share The calculation of earnings per share is based on:-

Retained profit for the year attributable to ordinary shareholders; and Number of ordinary shares outstanding during the year.

2010 2009 Retained profit for the year attributed to

ordinary shareholders US$ 12,719,000 US$ 11,920,000

Number of ordinary shares 1,000,000,000 1,000,000,000

The company has no additional potential shares outstanding.

Diluted earnings per shareThe calculation of diluted earnings per share was based on the profit attributable to ordinary shareholders of US$12,719,000 (2009: US$11,920,000) and a weighted average number of ordinary shares.

The denominator used in the calculation for the Basic Earnings per Share (EPS) is 1,000,000,000 for both 2010 and 2009.


68

COPPERBELT ENERGY CORPORATION PLCN

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1,85

1 48

,952

6,

325

4,80

9 7,

573

211,

106

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17

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7 50

,558

7,

172

5,19

6 5,

665

265,

590

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- -

13,7

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1 3,

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6 62

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53,7

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5,56

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6

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8 58

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69


14. Property, plant and equipment (continued)

(b) A schedule listing the properties as required by Section 164 and the Second Schedule of the Companies Act, Cap 388 of the Laws of Zambia is available for inspections by Members or their duly authorised representatives at the registered office of the company.

(b) Included in cost of property, plant and equipment are fully depreciated assets amounting to US$10.2 million (2009: US$9.02 million). The notional depreciation not charged in these financial statements on these assets amounts to US$534,000 (2009: US$504,000).

(c) The transfer of some of the title to property, transferred from ZCCM Investment Holdings (ZCCM –IH) has not yet been concluded, but is in progress.

(d) Capital borrowings: interest amounting to US$0 (2009: US$254,000) was capitalized to property, plant and equipment calculated at the rate of 2.5% plus LIBOR.

(e) At 31 December 2009 the Company’s properties were revalued by Bitrust Real Estate, Rainbow Surveys Limited and Sherwood Greene registered valuers on the basis of realizable market value. The Company’s primary transmission assets were revalued internally on the basis of depreciated replacement cost. The surplus on revaluation totaling US$113,080,000 was transferred to a revaluation reserve.

(f ) The Company has vehicles valued at US$1,627,419 (2009: US$1,507,361) under operating leases with Barclays Bank (Z) Ltd. These assets have not been capitalised in the Company’s books and are therefore, not included as part of property, plant and equipment.

(g) Included in capital work-in progress is an amount of US$1,388,000 relating to the development of the Kabompo Gorge Hydro Electric project.


70


2010 2009 US$’000 US$’00015. Investment in joint venture At cost At the beginning of the year 2,000 - Acquired during the year (a) - 2,000 At the end of the year 2,000 2,000

The company interest in a joint venture is as follows: 12 months to 31 Dec. Interest Country of Assets Liabilities Revenue Profit net Name Incorporation US$`000 US$`000 US$`000 US$`000 Realtime Technology Alliance Africa Zambia 3,380 2,594 4,679 263 50% 3,380 2,594 4,679 263 50%

2010 2009 US$’000 US$’00016. Inventories Fuel 2,839 2,875

Spares and consumables 623 631 3,462 3,506

17. Trade and other receivablesTrade receivables 19,567 27,309Less: impairment of debt (2,715) (3,192) 16,852 24,117Prepayments and deposits 702 554Other receivables (a) 6,506 6,024 24,060 30,695

(a) Employee share ownership plan The Company approved, in 2007, an Employee Share Ownership Plan (ESOP) to allow

members of staff to purchase shares in the Company at the time of floatation of these Company shares. The plan allowed the members of staff to obtain the loans to enable them to purchase shares. The other receivables include US$2.25million (2009: US$4.8 million) due from employees under the ESOP.

(b) The Company’s exposure to credit, currency and impairment losses related to trade and other receivables are disclosed in note 26.


71


2010 2009 US$’000 US$’00018. Cash and cash equivalents

Bank balances 8,785 2,291Petty cash 9 8 8,794 2,299

The Company’s exposure to interest rate risk and sensitivity analysis for financial assets and liabilities are disclosed in note 25.

2010 2009 US$’000 US$’00019. Share capital

Authorized1,000,000,000 (2009: 1,000,000,000)Ordinary shares of 0.01 US cents each(2009: 0.01 US cents each) 100 100

1 Special Share of 1 US Dollar - -

Issued and fully paid1,000,000,000 (2009: 1,000,000,000)Ordinary shares of 0.01 US cents each(2009: 0.01 US cents each) 100 100 1 Special Share of 1 US Dollar - -

(a) The rights relating to the Special Share include the right to convene, receive notice for and attend any general meeting of the Company or any meeting of any class of shareholders of the Company and to add items to the agenda.


72


20. Interest bearing loans 2010 2009 US$’000 US$’000At the beginning of the year 39,262 46,321Payments during the year (7,159) (7,059) 32,103 39,262Amounts due within one year (7,159) (7,159)At the end of the year 24,944 32,103

Due to:Development Bank of South Africa (DBSA) (note a) 2,000 3,200Citibank N. A. London, Citibank Zambia and DEG (note b) 20,103 26,062African Life Financial Services (note c) 10,000 10,000 32,103 39,262

This relates to the contractual terms of the Company’s interest bearing loans and borrowings, which are measured at amortised cost. The details of the Company’s exposure to interest rate, foreign currency and liquidity risk is in note 26.

2010 2009 Capital Capital payment Interest Principal payment Interest Principal US$000 US$000 US$000 US$000 US$000 US$000 Less than 1 year 7,159 1,124 7,159 7,159 1,879 7,159 More than 1 year 24,944 - 24,944 32,103 - 32,103 32,103 1,124 32,103 39,262 1,879 39,262

(a) The DBSA loan of US$2 million bears interest of LIBOR plus 1.9%. The loan is secured on the COSAK sub-station at Chambishi Metals PLC. The principal is repayable in 22 instalments commencing 31 December 2001 and will be fully repaid in 2012.

(b) The Citibank Zambia, Citibank N. A. London and DEG loan of US$20,102,591 is made up of three tranches (A (US$3,733,360/ B (US$9,600,000)/ C (US$6,769,231). Tranche A loan bears an interest of LIBOR plus 2.3%, while tranches B and C bear interest at LIBOR plus 2.5%. Tranche A is repayable in 9 equal instalments to end by December 2012, while tranches B and C are repayable in 13 equal instalments to end by December 2014.

(c) The US$10 million African Life Financial Services loan bears interest of LIBOR plus 2.5% and will be fully repaid by 2014. The loan has a five year grace period and will be repaid in four semi annual instalments commencing in September 2012.


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2010 2009 US$’000 US$’000

21. Non - current trade and other payablesMopani Copper Mines (note (a)) - 904First Quantum Mining and Operations (note (b)) 11,180 12,362 11,180 13,266

(a) The Mopani Copper Mines (MCM) long term creditor relates to the procurement of upstream transmission assets in Mufulira from MCM. The credit is interest free and repayment is based on achieving milestones for the sale of electricity through these assets. In the year under review, no repayment was made (2009: US$ nil). The reduction in liability to MCM represents write back of liability amounting to US$904,140 as result of non-achievement of agreed power consumption levels. At the inception of the agreement, the Company recognized an asset and liability at an amount equal to the fair value of the equipment.

(b) The First Quantum Mining and Operations (FQM) long term creditor relates to the procurement of transmission assets in Ndola area from FQM. The credit is interest free and repayment is over ten years. The assets were acquired in December 2008. At the inception of the agreement, the Company recognised an asset and liability at an amount equal to the fair value of the equipment.

(c) The Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 26.

2010 2009 US$’000 US$’000

22. ProvisionsAt the beginning of the year As previously stated - 3,300 Prior year adjustments (a) - - As restated - 3,300Provision used or released during the year (b) - (3,300)At the end of the year - -

The provision was made for the tax liabilities for the years prior to 30 April 2002, which were under dispute.

(a) The prior year adjustment relate to the over provision.

(b) Following the agreement of tax returns for tax periods 1998/99 to 2007/08, CEC paid $3.3m in October 2009 in respect of the estimated tax liabilities, which was under dispute for tax assessments for the tax years from 1998/1999 to 2003/2004.


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23. Deferred employee benefitsThe Company has established a defined contribution pension scheme for its employees, membership of which is compulsory. In addition, the Company provides further benefits to its employees based on the salary of each employee on retirement. The Company’s obligations, based on overall retirement benefits, are accounted for as a defined benefit scheme.

(i) Actuarial assumptionsAn actuarial valuation was carried out for the financial year ended December 2010. Assumptions for the Actuarial Valuation are as below:

Retirement benefit valuation done as per Table A shown below.

Salary increases have been assumed at 10%. Investment returns will exceed future inflation by 4% per annum.

Discount rate of 10% has been used on future cash flows.

Mortality is assumed as per actuarial assumptions.

Withdrawals have been put at a rate of 12.5% at age 20 reducing to nil at age 50 and thereafter.

Table AAge Annual rate20 12.5%25 10.0%30 7.5%35 7.5%40 5.0%45 2.5%50 0.0%55 0.0%

Normal retirement age for the company is 55 years.


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23. Deferred employee benefits (continued)

(ii) The amounts recognised in the statement of financial position are as follows:

2010 2009 US$’000 US$’000

Present value of unfunded obligation 3,946 2,809

Recognized liability for defined benefit obligation 3,946 2,809

Total employee benefits 3,946 2,809

(iii) Movement in the present value of retirement/redundancy obligations

2010 2009 US$’000 US$’000

At the beginning of the year 2,809 1,955Retirement provisions 2,105 541Exchange (gain)/Loss (644) 740Benefits paid (324) (427)At the end of the year 3,946 2,809

(iv) Expense recognized in the income statement

Current service costs 606 179 606 179

24. Trade and other payables Trade creditors 29,158 21,423

Accrued expenses 1,517 969Other creditors 3,730 1,724Social security and PAYE 63 459 34,468 24,575


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25. Related party transactionsOn 27 October 2006, Cinergy Zambia BV and National Grid Zambia BV (companies incorporated in the Netherlands) holding 77% shareholding of the company, passed resolutions to change their names to Zambian Power BV and Zambian Transmission BV. The two entities were subsequently acquired by Zambian Energy Corporation (Netherlands) BV. ZCCM – Investments Holdings PLC and individual shareholders continue to own shares in the Company.

The following transactions were carried out with related parties:

(i) Amounts due from/(to) related parties 2010 2009 US$’000 US$’000

Zambian Energy Corporation - (1,430)

(ii) Directors’ remunerationA listing of the members of the Board of Directors is included in the Directors’ report.

During the year, Directors received cash remuneration for services rendered to the company of US$131,624 (2009: US$117,076).

(iii) Executive management remuneration(Executive management team, excluding Directors (shown in (ii) above))

2010 2009 US$’000 US$’000 Short-term employment benefits 2,149 1,539 Post employment benefits 35 25 Total remuneration 2,184 1,564

(iv) Individual shareholdersThree shareholders of the Company are also Executive Directors. The Company pays salaries and provides other benefits to the three individual shareholders that are in employment with the Company.

(v) Zambian Energy Corporation LimitedTwo of the Zambian Energy Corporation Limited representatives on the Company’s Board are also Executive Directors. Both Executive Directors are also individual shareholders in the Company. The Company pays salaries and provides other benefits to the two members that are in employment with the Company.

(vi) Transactions with joint venturesDuring the year, CEC invoiced Realtime Technology Alliance Africa Limited (RTAA) US$2,457,572 for usage of the Fibre Assets. The Company also advanced RTAA US$250,000. For services rendered and assets acquired, the Company was invoiced US$2,760,054 by RTAA. The net outstanding balance to CEC at the reporting date was US$313,940.


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26. Financial instrumentsExposure to currency, interest rate, credit and liquidity risk arises in the normal course of the Company’s business.

(i) Credit riskExposure to credit riskThe carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Carrying amount 2010 2009 US$’000 US$’000

Trade and other receivables 24,060 30,695Cash and cash equivalents 8,794 2,299 32,854 32,994

The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:

Carrying amount

2010 2009 US$’000 US$’000

Domestic 16,103 23,702DRC 749 415 16,852 24,117

The Company’s most significant customer, Konkola Copper Mines PLC accounts for US$6,867,511 of the trade receivables carrying amount at 31 December 2010 (2009: US$13,373,342).

(ii) Impairment lossesThe aging of trade receivables at the reporting date was:

2010 2009 Gross Impaired Net Gross Impaired Net amount amount amount amount amount amountDays US$’000 US$’000 US$ US$’000 US$’000 US$

0 – 21 15,646 - 15,646 14,392 - 14,39222 – 45 28 - 28 7,277 - 7,27746 – 59 22 - 22 170 - 170Over 60 3,871 2,715 1,156 5,470 3,192 2,278 19,567 2,715 16,852 27,309 3,192 24,117


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26. Financial instruments (continued)(ii) Impairment losses (continued)

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

2010 2009 US$’000 US$’000

At the beginning of the year 3,191 4,737Write back of impairment loss (476) (1,546)At the end of the year 2,715 3,191

The collectability of receivables is assessed at the reporting date and specific allowances are made for any doubtful receivables based on a review of all outstanding amounts at the year end. Bad debts are written off during the year in which they are identified.

(iii) Liquidity riskThe following are the contractual maturities of financial liabilities:

31 December 2010: Longer Carrying Contractual Within 1 to 2 2 to 5 than 5 amount cash flows 1 year years years years US$’000 US$’000 US$’000 US$’000 US$’000 US$’000Non-derivativeFinancial liabilitiesLoans 32,103 32,103 7,159 9,559 15,385 -Trade payables 40,338 40,338 29,158 - 11,180 -

Other payables 5,310 5,310 5,310 - - -Total 77,751 77,751 41,627 9,559 26,565 -

31 December 2009: Longer Carrying Contractual Within 1 to 2 2 to 5 than 5 amount cash flows 1 year years years years US$’000 US$’000 US$’000 US$’000 US$’000 US$’000Non-derivativeFinancial liabilitiesLoans 39,262 39,262 7,159 9,559 14,569 7,955Trade payables 34,690 34,690 21,423 - 13,266 -

Other payables 4,582 4,582 4,582 - - -Total 78,534 78,534 33,164 9,559 27,835 7,955


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26. Financial instruments (continued) (iv) Currency risk

Exposure to currency riskThe Company’s exposure to foreign currency risk was as follows based on notional amounts:

2010 2009 US$’000 US$’000

Trade receivables 12 80Other receivables 99 161Other payables (1,189) (4,299)Balance sheet net exposure (1,078) (4,058)

The following significant exchange rates applied during the year:

Average rate 2010 2009 ZMK ZMK

US$1 4,797 5,047

(v) Fair valuesFair values versus carrying amounts

The fair values of financial assets and liabilities, together with carrying amounts shown in the balance sheet are as follows:

31 December 2010 At fair value through

income statement Designated Classified Held to Fair value On initial as held maturity Loans and for each Recognition for trading investments receivables class US$’000 US$’000 US$’000 US$’000 US$’000

Financial assetsReceivables Other receivables - - - 19,567 16,852Cash and cash equivalents - - - 8,772 8,772 Total financial assets - - - 28,339 25,624

Financial liabilitiesLoans - - - (32,103) (32,103)Trade payables - - - (29,034) (29,034)Other payables - - - (5,295) (5,295)Total financial liabilities - - - (66,432) (66,432) Net position - - - (38,093) (40,808)


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6. Financial instruments (continued) (v) Fair values (continued)

31 December 2009 At fair value through

income statement Designated Classified Held to Fair value On initial as held maturity Loans and for each Recognition for trading investments receivables class US$’000 US$’000 US$’000 US$’000 US$’000

Financial assetsReceivables Other receivables 27,309 24,117Cash and cash equivalents - - - 2,299 2,299 Total financial assets - - - 29,608 26,416

Financial liabilitiesLoans - - - (39,262) (39,262)Trade payables - - - (21,423) (21,423)Other payables - - - (4,582) (4,582)Total financial liabilities - - - (65,267) (65,267)

Net position - - - (35,659) (38,851)

27. Capital commitmentsCapital commitments authorised and contracted for by the Directors as at 31 December 2010 amounted to US$1,516,000 (2009: US$2,165,000). And capital expenditure authorised but not contracted for was US$nil (2009: US$nil).

28. Contingent liabilities There were no known contingent liabilities at 31 December 2010 (2009: US$nil).

29. Events subsequent to the reporting dateThere has not arisen, since the end of the financial, year any item, transaction or event of a material and unusual nature likely, in the opinion of the Board of Directors of the Company, to affect substantially the operations of the Company, the results of its operations or state of affairs of the Company in the subsequent financial years.


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CEC’s Compliance Status of Corporate Governance RulesThe LuSE Corporate Governance Framework has 99 principles grouped into 16 categories. A review of CEC’s compliance with the LuSE Corporate Governance Code indicates that the Company’s compliance rate is at 88%. The summary of the compliance status is indicated in the chart while brief details of areas that are not fully compliant are given below.

1. AREAS OF NON COMPLIANCE

The only area of non compliance concerns the requirement for the Audit Committee to review the expense accounts of the Executive Directors. This process will be implemented in 2011.

2. AREAS OF PARTIAL COMPLIANCE

There are nine (9) areas of partial compliance as follows:

i). Three (3) are concerned with the self evaluation of the Board, the Board Committees and the Company Secretary.

ii). Three (3) have to do with the communication of the company’s code of conduct to all stakeholders as well as monitoring compliance with the code.

iii). Two (2) areas deal with implementation of a long-term incentive program for management. iv). The final area concerns the requirement to specifically integrate into CEC’s business practice human

capital development in areas of demographics – gender, people with disabilities, corporate training initiatives, employee development and financial investment committed to the development of these areas.

CEC is already at various stages of implementation in all the above areas, and compliance is expected to be at 100% by the end of 2011.

3. AREAS THAT ARE NOT APPLICABLE

There are two areas that are not applicable to CEC:

i). The requirement for the roles of the Chairperson of the Board of Directors and Chief Executive Officer to be performed by separate persons.

ii). The requirement that where share options have been granted to Non-Executive Directors, the Board must obtain the prior approval of share owners and meet the specific requirements of the Companies Act.

This first requirement is optional and the CEC Board opted for the alternative of having an Executive Chairperson and a Non-Executive Vice Chairperson; while in the second instance, CEC has not granted any share options to its Non-Executive Directors.

88%

1% 9% 2%

100% Compliant Not Compliant Partial Compliance Not Applicable

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Directors Executive Chairman

Executive

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Company Secretary

Executive

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Non Executive

Non Executive

Non Executive

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CEC Executive Management Team

Hanson SindoweExecutive Chairman

Neil CroucherManaging Director – Operations

Michael TarneyManaging Director – Corporate Development

Humphrey MulelaChief Operating Officer

Aaron BothaDirector – Kabompo Project

Julia C Z ChailaCompany Secretary / Director Legal Services

Roland LwiindiDirector – International Projects

Silvester HibajeneDirector – Strategy & Regulation

Mutale MukukaCorporate Finance Director

Chance MugalaOperations Finance Director

Owen SilavweCommercial Director

Benny SimukokoProjects Director

Yonah BandaTechnical Director

Jonathan SokoDirector Special Projects

Jacob NjovuHuman Resource Director

Patson JilaOn secondment to the University of Zambia

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Corporate Contact Information

OPERATIONS HEAD OFFICE

Copperbelt Energy Corporation PLC23rd AvenueP O Box 20819Nkana East Kitwe

Phone : 260 212 244556Fax : 260 212 244040

CORPORATE HEAD OFFICE

Copperbelt Energy Corporation PLC37B Cheetah RoadPost Net 145P/Bag E835Kabulonga Lusaka

Phone : 260 211 261647Fax : 260 211 261640

SHAREHOLDER CONTACT

Julia C Z ChailaCompany Secretary/Director Legal Services

Phone : 260 212 244274Fax : 260 212 244212

Clara M MusamaInvestor Relations Manager

Phone : 260 212 244916Fax : 260 211 261640

Website : www.cecinvestor.comE-mail : [email protected]

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Bankers

Stanbic BankCorner Obote AvenueP O Box 21600Kitwe

Citibank Zambia LtdCitibank HouseSouth EndCha cha cha RoadP O Box 30037Lusaka

Citibank LondonCitiGroup CenterCanada SquareCanary WharfE145LBLondon

AuditorsGrant Thornton5th Floor Mukuba Pension HouseDedan Kimathi RoadP O Box 30885Lusaka

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Notes


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